Revised list of document for opening of bank account of Sole Proprietorship Firm

RBI/2011-12/506 DBOD. AML.BC. No 93 /14.01.001/2011-12                    April 17, 2012

 

The Chairmen / Chief Executive Officers

All Scheduled Commercial Banks (excluding RRBs)/

All India Financial institutions/ Local Area Banks

 

Dear Sir,

 

Know your Customer (KYC) Guidelines – Accounts of Proprietary Concerns

1. Please refer to our circulars DBOD. AML BC. No. 80/14.01.001/2009-10 dated March 26, 2010 and DBOD. AML.BC. No. 38 /14.01.001/2010 -11 dated August 31, 2010regarding customer identification procedure for opening accounts of proprietary concerns.

 

2. On a review, it has been decided to include the following documents in the indicative list of required documents for opening accounts of proprietary concern:

 

i) The complete Income Tax return (not just the acknowledgement) in the name of the sole proprietor where the firm’s income is reflected, duly authenticated/ acknowledged by the Income Tax Authorities.

ii) Utility bills such as electricity, water, and landline telephone bills in the name of the proprietary concern.

 

 

Yours faithfully,

(Sudha Damodar)

Chief General Manager

Any registration document will be enough for opening sole proprietorship bank account

RBI/2010 -11/187
DBOD. AML.BC. No. 38 /14.01.001/2010 -11

August 31, 2010

The Chairmen and Chief Executive Officers

All Scheduled Commercial Banks excluding  RRBs/
All India Financial institutions/ Local Area Banks

Dear Sir,

Know Your Customer (KYC) guidelines – accounts of proprietary concerns

Please refer to our circular DBOD.AML.BC.No. 80/14.01.001/2009-10 dated March 26, 2010 advising banks to lay down criteria in their  customer identification procedure for opening accounts of proprietary concerns.

2.  In this connection, it is clarified that in addition to the documents listed in paragraph 2(i) of our circular referred to above for opening a bank account in the name of a proprietary concern, banks may also accept any registration/licensing document issued in the name of the proprietary concern by the Central Government or State Government Authority/Department.  Banks may also accept IEC (Importer Exporter Code) issued to the proprietary concern by the office of DGFT as an identity document for opening of bank account.

Yours faithfully,

(Vinay Baijal)
Chief General Manager

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How to open a Bank account for Sole Proprietorship

To open a Current account in the name of sole proprietary firm, RBI has issued certain guideline regarding KYC for such account.

Know your Customer (KYC) guidelines – accounts of proprietary concerns

A reference is invited to Para 2.4(a) of the Master Circular on KYC/AML/CFT/Obligation of banks under Prevention of Money laundering Act (PMLA), 2002 issued to banks vide DBOD.AML.BC.No.2/14.01.001/2009-10 dated July 1, 2009. It has been advised to banks that internal guidelines for customer identification procedure of legal entities may be framed by them based on their experience of dealing with such entities, normal bankers’ prudence and the legal requirements as per established practices. If the bank decides to accept such accounts in terms of the Customer Acceptance Policy, the bank should take reasonable measures to identify the beneficial owner(s) and verify his/her/their identity in a manner so that it is satisfied that it knows who the beneficial owner(s) is/are

2.  For sake of clarity, in case of accounts of proprietorship concerns, it has been decided to lay down criteria for the customer identification procedure for account opening by proprietary concerns. Accordingly, apart from following the extant guidelines on customer identification procedure as applicable to the proprietor, banks / financial institutions  should  call  for and  verify  the  following documents before opening of accounts in the name of a proprietary concern:

  • Proof of the name, address and activity of the concern, like registration certificate (in the case of a registered concern),
  • Certificate/licence issued by the Municipal authorities under Shop & Establishment Act,
  • Sales and income tax returns,
  • CST/VAT certificate,
  • Certificate/registration document issued by Sales Tax/Service Tax/Professional Tax authorities,
  • Licence issued by the Registering authority like Certificate of Practice issued by Institute of Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian Medical Council, Food and Drug Control Authorities, etc.
  • The complete Income Tax return (not just the acknowledgement) in the name of the sole proprietor where the firm’s income is reflected duly authenticated/ acknowledged by the Income Tax Authorities.

  • Utility bills such as electricity, water, and landline telephone bills in the name of the proprietary concern.

ii) Any two of the above documents would suffice. These documents should be in the name of the proprietary concern.

4. These guidelines will apply to all new customers, while in case of accounts of existing customers, the above formalities should be completed in a time bound manner and should be completed before December 31, 2010.