Question 1

What is the Minimum Average Balance (MAB) for a current account?

Accepted Answer

Minimum Average Balance (MAB) is the average of all closing balances in your current account over a month. Most banks require an MAB of ₹10,000–₹25,000 for regular current accounts, while premium or multi-city current accounts may require ₹50,000–₹1,00,000 or more. Failing to maintain MAB results in penalty charges ranging from ₹100 to ₹500 per month.

Question 2

What is an overdraft facility in a current account?

Accepted Answer

An overdraft (OD) facility allows you to withdraw money beyond the available balance in your current account, up to an approved limit. It is useful for managing temporary cash flow gaps in businesses. Interest is charged only on the amount used, not the entire limit, typically at 12–18% per annum.

Question 3

What are RTGS and NEFT charges for current account transactions?

Accepted Answer

RTGS (Real Time Gross Settlement) is for high-value transfers above ₹2,00,000 and is usually free or charged at ₹25–55 per transaction. NEFT (National Electronic Funds Transfer) works in batches and costs ₹2–25 per transaction depending on the bank. Most banks offer free unlimited NEFT/RTGS for premium current account variants.

Question 4

What is the difference between a regular and multi-city current account?

Accepted Answer

A regular current account is linked to a single branch, while a multi-city current account allows you to operate from any branch of the bank across India without additional charges. Multi-city accounts are ideal for businesses with operations in multiple cities, offering greater flexibility but often requiring a higher MAB.

Question 5

What documents are required to open a current account?

Accepted Answer

For a current account, you typically need: (1) Certificate of Incorporation or Partnership Deed, (2) PAN Card of the business entity, (3) GST Registration Certificate, (4) Address proof of the business (rent agreement or utility bill), (5) Identity proof and address proof of all authorised signatories (Aadhaar, PAN, passport), and (6) Recent photographs. Additional KYC may be required for high-value accounts.

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