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Press Release
Understanding Cash Withdrawal Limits on Current Accounts
Posted on Wednesday, July 31st, 2024 | By IndusInd Bank
The Reserve Bank of India (RBI) removed the cash withdrawal limits at ATMs for current accounts in 2017. This decision enabled businesses to streamline cash flow management, reduce operational hassles, and enjoy enhanced overall financial flexibility.
Let’s delve into the implications of this change, the importance of current accounts, and related cash deposit limits.
What is a Current Account?
A current account is a type of bank account designed for businesses, professionals, and individuals who conduct frequent financial transactions. Unlike savings accounts, current accounts allow deposits and withdrawals without restrictions. This feature makes them ideal for handling large volumes of transactions.
- Current accounts support an unlimited number of deposits and withdrawals, catering to the high transaction needs of businesses.
- Many current accounts come with an overdraft facility. It allows account holders to withdraw more than their available balance, subject to specific limits.
- Current accounts do not earn interest on the balance maintained. They focus on providing liquidity and transaction convenience.
The RBI’s decision to remove cash withdrawal limits from ATMs for current accounts has many benefits, particularly for business operations that require immediate access to cash.
Benefits of Removing Cash Withdrawal Limits
Here’s how account holders can benefit from the removal of cash withdrawal limits from current accounts:
- Enhanced Liquidity: Businesses can now withdraw large amounts of cash as per need. This helps in improving cash flow management and ensuring smoother operations.
- Operational Efficiency: Fewer trips to the bank or ATM save time and effort, enhancing business efficiency.
- Financial Flexibility: Immediate access to cash helps in better handling of unexpected expenses.
Cash Deposit Limits on Current Accounts
It is important to understand the cash deposit limits associated with current accounts. These limits help to prevent money laundering and ensure regulatory compliance.
Here’s what you need to know about cash deposit limits.
- Banks may impose daily limits on cash deposit amounts into a current account. These limits vary by bank and account type.
- For large cash deposits, banks might require additional documentation to verify the source of funds.
- Some banks may levy charges for cash deposits exceeding a certain limit, impacting the cost-effectiveness of frequent large deposits.
Managing Cash Deposit Limits
It is crucial to navigate the limits of cash deposits imposed by banks for smooth business operations. Here are some strategies to consider:
- Scheduled Deposits: Plan your deposits to stay within the daily limit. This reduces the risk of incurring additional charges.
- Digital Payments: Encourage clients and customers to use digital payment methods, minimising the need for large cash deposits.
- Multiple Accounts: You can have multiple current accounts to distribute large cash deposits and stay within the prescribed limits of each account.
Also Read: How to Link My Online Current Account with Google Pay?
Opening a Current Account
Opening a current account is straightforward but requires fulfilling specific requirements. Here is a step-by-step guide to help you through the process:
- The first step is to choose the bank that is right for you. Research and compare to find a bank that offers the best features and services for your business needs.
- Once you have shortlisted your banking partner, get a list of required documents. Documents such as identity proof, address proof, business registration certificate, and PAN card are required.
- Fill out the account opening form and submit it along with the required documents.
- The bank will verify your documents and conduct a background check.
- Once verification is complete, your current account gets activated, and you can start transacting.
