Will a current account be closed if it has zero balance? - iBlogs (2024)

Posted on Wednesday, March 22nd, 2023 | By IndusInd Bank

The business sector in India has undergone a remarkable transformation over the past few decades and is now recognized as one of the most dynamic and diverse in the world. With a large and growing consumer base, a vibrant entrepreneurial ecosystem, and a favorable policy environment, India has become a hub for several industries, including information technology, manufacturing, healthcare, and services. The business landscape is also witnessing significant changes driven by the emergence of new technologies. Additionally, the government’s initiatives such as Make in India, Digital India, and Startup India have created a conducive environment for businesses to flourish. To thrive in this dynamic business landscape, having a current account becomes an essential financial tool for businesses.

A current account is a critical financial tool for businesses that require a high volume of transactions. It allows them to make and receive payments easily and provides the flexibility to make frequent deposits and withdrawals. This is essential for businesses to manage their day-to-day expenses effectively and ensures that their cash flow remains uninterrupted.

1. A current account is essential for businesses to conduct daily financial transactions.
2. It provides the convenience of making unlimited transactions without restrictions on withdrawals and deposits.
3. It helps in managing cash flows, providing overdraft facilities, and maintaining a record of financial transactions.
4. A current account can be used to receive payments from customers, make payments to suppliers, and manage salaries and wages for employees.
5. It provides access to various banking services, such as internet banking, mobile banking, and cheque books, that can help in streamlining business operations.

IndusInd Bank offers a wide range of current accounts to meet the unique banking requirements of businesses. Whether you are looking for a current account that can cater to your present banking needs or one that can support your future expansion plans, IndusInd Bank has got you covered.

By opening a current account with IndusInd Bank, you can enjoy a range of benefits, including instant account opening with minimal paperwork, an account number of your choice with the My Account My Number feature, and account grouping for related business entities with common authorized signatories.

Moreover, IndusInd Bank Current Accounts come with pre-approved loans that can be availed instantly to meet your capital requirements. The bank also provides a cheque/cash pick & drop facility on call, which is extremely convenient for businesses that require frequent cash or cheque deposits. Additionally, you can open IndusInd Bank Current Account without any branch visits using Video KYC!

Minimum balance on current accounts

Banks also mandate a minimum balance requirement in a current account, which refers to the minimum amount of money a customer must maintain in their account at all times. This requirement can vary based on account type, location, and usage among different banks. Failure to maintain the minimum balance may result in a nominal fee or account closure, depending on the bank’s policies. One question that often comes up with current accounts is whether a current account can be closed if it has a zero balance.

Will a current account be closed if it has zero balance?

The short answer is that it depends on the bank’s policies and procedures. Some banks may close a current account if it has been inactive for a certain period of time, such as six months or a year, regardless of the balance. Other banks may allow the account to remain open even if it has a zero balance, as long as the account holder continues to meet certain conditions, such as making frequent deposits or maintaining the minimum balance.

One reason why a bank may choose to close a current account with a zero balance is that it can be costly to maintain. Banks incur costs for providing account holders with services such as ATM withdrawals, online banking, and customer support, even if the account has no funds. Additionally, the bank may be unable to recover these costs if the account holder does not generate any revenue or profit for the bank. In this case, it may be more cost-effective for the bank to close the account rather than continue to incur costs.

However, there are also reasons why a bank may choose to keep a current account open even if it has a zero balance. For example, the bank may view the account holder as a potentially valuable customer who may generate revenue in the future. The bank may also want to maintain a relationship with the account holder and may see the current account to do so. Additionally, the bank may be willing to offer incentives, such as waiving fees or providing preferential rates, to encourage the account holder to continue using the account.

If a current account holder is concerned about their account being closed due to a zero balance, they should review the terms and conditions of their account agreement and contact their bank to discuss their options.

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circ*mstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.