Do You Require a Current Account to Register an MSME?

Posted on Wednesday, September 11th, 2024 | By IndusInd Bank

If you are planning to register your business as a Micro, Small, and Medium Enterprise (MSME) and wondering if you need a current account, the answer is yes! For registering your business as an MSME, it is often necessary to have a functional current account to facilitate financial transactions and maintain proper records.

A current account helps in differentiating personal finances from business finances, ensuring better financial management and transparency. It also provides access to distinct banking facilities, such as business loans, overdraft protection and credit lines, which are essential for business growth and operations. Additionally, having a current account can enhance your business’ credibility with suppliers, customers, and financial institutions. Continue reading to learn more about MSME registration, and why a current account is a must.

What is MSME registration?

The step to opening a current account is just the initial point of consideration towards MSME registration planning. The next step involves the application process. MSME registration, also known as Udyam Registration, is available to entities that meet the MSME turnover limit. They can apply for MSME registration through the government portal – the Udyam portal.

The MSME registration documents required are as follows –

• PAN card
• Aadhaar card

No MSME registration fees are charged. MSME registration can be done under two categories in the Udyam portal –

• For new entrepreneurs who are not registered yet as MSME or those with EM-II
• For those already having registration as UAM and for those already having registration as UAM through assisted filling.

Why do You Need a Current Account?

A current account is essential for your MSME because of several reasons. Here are three key points –

Facilitates High Volume of Financial Transactions

MSMEs often witness frequent and high-volume transactions. A current account is particularly designed to manage transactions efficiently, providing features such as electronic funds transfer, bulk payments, and real-time updates. This ensures smooth monetary operations, which are crucial for business compliance and growth.

Access to Advanced Banking Solutions

Current accounts offer specialised banking services, such as credit lines, business loans and overdraft options. These services are crucial for managing cash flow, financing expansion needs, and addressing any financial contingencies. Such facilities are usually not available for savings accounts, making a current account prudent for MSMEs.

Enhanced Financial Record-Keeping

A current account helps maintain separate and clear business transaction records, which are vital for auditing and tax purposes. Accurate financial records are a mandatory requirement for MSME registration and subsequent compliance with regulatory requirements.

Open the Indus Max Current Account

Opening a current account, particularly a specialised one like the Indus Max Current Account by IndusInd Bank, offers distinct benefits. This current account offers a host of value for money and practical features to help you grow your small business. Key benefits of this account include:

Also Read: 5 Pointers to Consider When Opening a Current Account

Ending Note

A current account is not just a formality but a necessity for running and registering an MSME. It facilitates seamless financial transactions, helps in tracking expenditures, builds business credibility, supports digital transactions, and eases access to credit.

Opting for a specialised current account like the Indus Max Current Account can provide benefits personalised to the needs of small businesses. The account can also help you manage your business’s finances and operational needs with ease.

So, do not procrastinate any longer. Enjoy the unparalleled benefits tailored to support your business growth with the Indus Max Current Account.

Apply now!

Disclaimer:The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. 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 making any financial decisions based on the contents and information.