What banks ask for to open a business current account

People arrive at this question expecting a checklist and are told different things by two branches of the same bank. That is not incompetence. The requirement is assembled from three layers, and only two of them are common to everybody.

The bottom layer is statutory: customer due diligence under the Prevention of Money-Laundering Rules, operationalised through the Reserve Bank of India's Master Direction on Know Your Customer. This fixes the categories — verify identity, verify address, identify beneficial owners — and specifies what counts as an officially valid document. It applies identically to every regulated bank.

The middle layer is entity-dependent. The bank must satisfy itself that the business exists and that the person in front of it is authorised to operate the account. What proves that is completely different for a company and for a proprietor, for reasons explained below.

The top layer is the individual bank's risk policy, and it is the one that varies. A bank may ask for more than the minimum, and legitimately. This is why the only authoritative list is the one the bank you are applying to publishes or hands you, and why any general article — including this one — should be read as an explanation of the shape of the requirement rather than as the requirement.

Three things are asked for regardless of how the business is structured.

The entity's Permanent Account Number. For a company, LLP or partnership this is a PAN issued in the entity's own name. For a proprietorship there is generally no separate entity PAN, because the proprietor and the business are the same person in law, so the proprietor's own PAN does the work — which is the first place people expect a document that does not exist.

Identity and address verification for every authorised signatory, and separately for beneficial owners where the entity is a company, LLP or partnership. This is individual-level due diligence, and it is why an otherwise complete application stalls when one of four partners has not completed their own verification.

Proof of the business premises. This is the item most often underestimated. The proof needs to connect the address to the entity, which is straightforward when the entity owns or leases in its own name and awkward when the premises are held personally or by a family member. In that situation banks typically look for the lease or rent agreement together with a no-objection letter and a utility bill, and precisely which combination is acceptable is a bank-level decision.

A sole proprietorship is not a separate legal person. There is no registrar, no certificate, and nothing that corresponds to a certificate of incorporation. The business exists because a person is carrying it on. That creates a genuine evidential gap for a bank that has to record that a business, not merely an individual, is operating the account.

Banks close that gap by asking for registrations and filings that only a real trading business would hold, and generally by asking for more than one of them, from different issuing authorities. The candidates are the familiar ones: GST registration in the firm's name, a shop and establishment registration, a municipal trade licence, professional tax registration where the state levies it, an importer-exporter code, a food licence for a food business, a certificate or registration from a statutory professional body, or the firm's own income-tax filings showing business income.

How many are required, and which combinations are acceptable, is a bank policy question rather than a regulatory one. The reliable expectation is that a proprietor will be asked to demonstrate the business's existence from at least two independent sources, and that filings in the trading name are worth more than documents in the individual's name alone.

For a partnership the central document is the partnership deed, because it is the deed that establishes both that the firm exists and who may bind it. Banks read it for two things specifically: the list of partners, and the clause dealing with authority to operate bank accounts. A deed silent on banking authority is a common cause of an application stopping while a supplementary deed or a partners' resolution is arranged.

Alongside it sit the firm's PAN, the registration certificate where the firm is registered with the Registrar of Firms, and identity and address verification for the partners. An unregistered partnership is not illegal, but registration status affects what other evidence the bank leans on.

A limited liability partnership is a body corporate and behaves more like a company for this purpose. The certificate of incorporation, the LLP identification number, the LLP agreement, the firm's PAN, and details of designated partners including their identification numbers are the usual set. In both cases the operative question the bank is answering is not merely whether the firm exists but who, precisely, is authorised to sign — and the document that answers it is the deed or the agreement, which is why an out-of-date one causes so much friction.

For a company the evidence of existence is unambiguous, which makes this the most predictable case even though the file is the thickest. The certificate of incorporation, the memorandum and articles of association, the company's PAN, and the corporate identity number establish the entity.

What establishes authority is a board resolution. This is the document that names which officers may open and operate the account, in what combination, and up to what limits if any. Banks usually require it on the company's letterhead, certified in the form the bank specifies, and it is common for a bank to want its own format used rather than a generally worded resolution. A resolution that names positions rather than people, or that omits the mode of operation, is the routine cause of a return.

Beyond that: a list of directors with their director identification numbers, identity and address verification for the directors and authorised signatories, and a declaration of beneficial ownership identifying the individuals who ultimately own or control the company above the prescribed threshold. The beneficial ownership declaration is a due-diligence requirement rather than a formality, and in a company with layered or corporate shareholders it is often the item that takes the longest to assemble accurately.

The documents are rarely the problem. Consistency between them almost always is.

Name mismatch is the leading cause. The trading name on the GST certificate, the name in the deed, the name on the utility bill and the name on the application need to agree, and abbreviations, an added or dropped “and”, or a spelling that drifted between two registrations are all enough to stop the file. Address mismatch behaves the same way, and is more common because businesses move and update some registrations but not others.

The second cause is individual-level: a signatory whose own verification is incomplete, or whose periodic re-verification with that bank has fallen due. The entity's file can be perfect and the account will still not open.

The third is authority: a deed or resolution that does not clearly say who may operate the account.

On timelines, no honest figure exists to publish. How long it takes depends on the bank, the entity type, whether the file is internally consistent, and whether verification of the premises is required. The bank you are applying to is the only source for that, and asking for it in writing at the outset is more useful than any published average.