The article discusses how a bank account is closed. You will learn for what reasons an account may be closed, what documents will be needed for this, and how to fill out the application correctly. In addition, you will learn about the procedure for closing a current account at the initiative of a bank, legal entity or individual entrepreneur.
Reasons for closing a bank account
Sometimes a current account has to be closed. The reasons for such actions may be different, the most common option is receiving a more advantageous service offer from another financial institution.
Let's look at why clients close their current account. The reasons for this may be:
- reorganization or liquidation, including during bankruptcy proceedings;
- dissatisfaction with the quality of service;
- lack of normal Internet banking or its unsatisfactory operation;
- inconvenient location of branches of a financial organization combined with the inability to resolve issues remotely;
- doubt about the stable financial position of the bank.
This list does not include all possible reasons for closing an account. For example, when issuing a loan to a legal entity, many banks insist on completely refusing to work with other financial institutions. And although the requirement is unspoken, if it is not met, it can be quite difficult to get a loan.
Why did the bank close the current account unilaterally?
Sometimes the bank terminates the cash settlement agreement and closes the account unilaterally. But for a banking organization this is far from the simplest situation. Previously, a credit institution could terminate a cash settlement agreement only after receiving a court decision, but the situation changed somewhat in 2005.
Let's consider when a bank can, on its own initiative, close a current account without going to court:
- there have been no transactions on the account for more than two years;
- violation of laws related to anti-money laundering and combating financial terrorism;
- to comply with the requirements of the FATCA law.
The bank can terminate the agreement unilaterally without trial if the client does not use it. In this case, three conditions must be met simultaneously:
- The client's account has a zero balance for two years.
- The client has not performed a single transaction on the account for more than two years.
- The bank sent a warning to the client 2 months before the expected date of termination of the contract.
Note . It does not matter whether the account owner received the notification or not, the main thing for the bank is to have confirmation of the fact of sending. For this reason, the bank is still forced to send a letter of declared value or registered letter with notification.
According to 115-FZ, the bank is obliged to stop even attempts to perform dubious transactions and request documents from the client, and then figure out how legal a particular transfer of funds was. According to the same Federal Law, if a bank blocked questionable transactions twice in a year, then it can terminate the cash settlement agreement with the client unilaterally.
We advise you to read: Blocking an account by a bank under Federal Law 115 - what the dangers are, the consequences
Alas, there are virtually no clear regulations for the application of 115-FZ, and the recommendations of the Central Bank do not take into account the characteristics of many categories of business. At the same time, the training of responsible bank employees is often more formal in nature. As a result, legitimate transactions often appear suspicious to the credit institution.
In theory, the bank should ask the client to provide supporting documents and, if everything is fine during the check, then continue working with him. In practice, most often they offer to terminate the contract at the client’s initiative and even provide a sample of the corresponding application. In this case, the money is offered to be transferred to another bank, often with the deduction of a significant commission.
Important ! According to Russian laws, a taxpayer is required to report income to the tax service, as well as pay taxes and fees in the prescribed amount. If you violate these requirements, then the bank’s refusal of service with reference to the norms of 115-FZ will not take long.
Finding yourself in such a situation, it is you who will have to decide whether you agree to leave a particular bank or whether you will continue to fight to defend your interests. It should be borne in mind that at present, organizations and individual entrepreneurs who were asked to close an account and go to another bank are automatically blacklisted, and they are reluctant to open a new account.
If you know that all transactions were legal, and there is confirmation of them, then it makes sense to seek protection of interests through the court, without terminating the agreement with the original bank.
We advise you to read: Blocking of a current account by a bank: reasons, how to unblock it
Foreign organizations may lose their current account if they did not provide the necessary information, in particular, did not report that they are foreign taxpayers, did not respond to the bank’s request within 15 days, did not provide consent to transfer data to a foreign tax authority, etc. d.
Reasons for closing a current account by a client
Sometimes the situation develops in such a way that the organization’s current account has to be closed. There are different reasons for such a measure, but the most common of them is one - switching to service in another bank
due to more favorable conditions for the payment instrument.
Other reasons for closing a PC:
- reorganization measures in the company (including during bankruptcy proceedings);
- liquidation of the company (including during bankruptcy proceedings);
- dissatisfaction with the operating conditions of the product within the bank's cash settlement services;
- low-quality online banking or its absence;
- underdeveloped network of ATMs and branches of financial institutions;
- inability to resolve emerging issues remotely in a short time and with the necessary comfort;
- there are doubts regarding the stability of the financial condition of the banking organization.
The listed provisions describe the main circumstances
, provoking the refusal of cash settlement services in a particular bank. In addition, we can also mention the intrusive banking policy in matters of client interaction with other financial institutions. Here the nuance with competition is acute.
Important! Not everywhere a business receives the necessary loans and payment instruments if it is serviced by several banks at once.
Note 1.
A separate group of reasons is associated with sanctions from government agencies. For example, if we are talking about a conflict with the Federal Tax Service due to non-payment of taxes, suspicious transactions, etc. In this case, the businessman first faces the blocking of the PC, and then its closure (often at the initiative of the service provider).
Documentation
Often all the necessary documents are already at the bank’s disposal, because the organization or entrepreneur was serviced by it and transferred all the required papers when opening a current account. However, often the situation may turn out to be non-standard, and additional documents will be required.
A pre-prepared package of documents, which includes:
- an order to close an account indicating the person entitled to perform this operation;
- an extract from the legal register received less than 30 days ago. persons;
- protocol/decision of the founders (if necessary);
- documents confirming changes in the constituent documents, if they have not previously been submitted;
- applicant's passport;
- checkbook (card).
If the account is closed when the organization’s activities cease due to bankruptcy, then the bankruptcy trustee will handle this. He will be required to provide a passport and a copy of the act confirming his appointment to the position.
An individual entrepreneur only needs to submit an application in person to the office of a financial institution and hand over a checkbook or card.
Letter on closing a current account
An application for closing an account can be filled out directly at the bank office or prepared in advance using the prescribed form. Often a sample document can also be found on the official website of the financial institution. Using standard forms allows you to minimize inaccuracies and errors.
The document must contain the following information:
- name of the organization or full name entrepreneur;
- details of the account that needs to be closed;
- reference to the number and date of the cash settlement agreement;
- checkbook information (if issued);
- details for refund or instructions to issue the balance in cash;
- signature of an authorized person and seal (if available).
Responsibility for violation of the law
More recently, in accordance with Article 118 of the Tax Code of the Russian Federation, failure to comply with the established deadlines for submitting a notification to the tax office was an offense and could become the basis for imposing a monetary fine on a legal entity. The fine was fixed and amounted to 5,000 rubles. For bank employees responsible for reporting, if the filing deadlines are violated, the fine may vary from 1 to 2 thousand rubles.
You need to know that not in all cases the absence of an application to terminate banking services could become the basis for prosecution. In the case where the contract was terminated unilaterally, the legal entity or individual was not held liable.
The following reasons may be grounds for unilateral termination of a service contract:
- complete lack of funds and banking transactions for two years;
- violation of the law when conducting settlement transactions;
- the court's decision.
The bank is responsible for late submission of information in these cases. He may be required to pay a fine of 20 thousand rubles (Article 132 of the Tax Code of the Russian Federation).
In the event that a financial institution does not agree that penalties are imposed on it, it can file a claim in court and try to protect its rights there.
It is important to know
Until May 2014, these requirements applied not only to accounts in national currency, but also to all foreign currency accounts, both current and transit, as well as special accounts in foreign currency. Therefore, submitting an application to close a current account to the tax office before May 2014 was also mandatory for them.
Before it was no longer mandatory for legal entities to submit a notice of termination of an agreement with a bank, they should have been very careful about this procedure, since forgetfulness could lead to monetary penalties and liability. Now legal entities can breathe a little more freely and devote more time to developing their own business.
Procedure for closing a current account
There are usually no problems with closing a current account. This is a fairly standard operation. If possible, you should withdraw balances to other accounts in advance, leaving only the amount to pay the commission (if any).
Important ! If you have a debt for the services of a financial institution, you will not be able to close your current account; you will first have to pay off the debt.
Let's consider the general procedure for closing a current account:
- Submitting an application to close the account and terminate the contract.
- Repayment of debts for the services of a credit institution (if any).
- Return of check books and issued cards.
- Withdrawal of the remaining funds if this has not been done in advance.
- Receipt of a document confirming account closure.
How to submit an application to the bank to close an account
The process of closing a current account begins by submitting an application to the bank. The application form can be requested from bank employees, or downloaded from the bank’s website. The application form must provide the following information:
- details of the contract that is subject to termination;
- account balance;
- account holder information.
Having filled out the application, it must be certified by a bank employee who puts the date, signature and seal.
If the process of closing the current account is successful, then a certificate of closure will be issued. Banks are not required to provide such a certificate, but individual entrepreneurs and organizations have the right to request it. In this case, the bank issues a certificate notification of account closure, which indicates the following information:
- name of the banking institution;
- information about account closure indicating the details of the account owner;
- the position of the employee who accepted the application, as well as his signature and seal.
Previously, a certificate was necessary to notify the tax and pension account about the closure of the current account. But since today the bank does this, obtaining a certificate is not mandatory. However, it should be obtained in order to avoid possible situations that arise after completion of this procedure.
Fees and deadlines for closing a current account
You can find out how much it costs to close a current account in the tariffs of the credit institution or by calling the contact center. Usually this procedure is free. However, some banks want to make money on everything or introduce quite significant commissions for such an operation.
According to current legislation, the period for closing a bank account is 7 days. An entry on the closure of a current account in the internal documents of the credit institution is made no later than the next business day after the termination of the cash settlement agreement. If there are no balances on the account and it is closed at the client’s initiative, then this takes very little time.
The increase in the time it takes to close an account during liquidation is due to the need to repay all debts to creditors.
Closing methods
There are several options for closing an account: automatic, at the initiative of the bank, at the request of the client.
Bank accounts are automatically closed upon expiration. For example, when the deposit term expires without the possibility of extension, on the day of maturity, the client withdraws money or the funds are transferred to the current account, and the deposit account is closed. The investor will not need to take any additional actions.
Unclaimed accounts for which there is no movement for a certain time, the bank can close unilaterally . In this case, the client must be notified in advance in writing of the need to close the account. The account will be closed if there is no money on it and the bank has no claims against its owner. If there is a balance on the account, the bank does not have the right to close it, even if the client does not use it for a long time.
How to close an account yourself
The reasons for early termination of the service agreement and account closure may be:
- Transfer to another bank;
- Early withdrawal of deposit;
- Upon liquidation of a company (for legal entities).
It is important to know: a credit institution cannot prohibit closing an account at the client’s initiative if penalties have not been imposed on it from authorized bodies and the client is not a debtor of the bank.
You can close accounts at bank branches or use online banking from credit companies. In different banks, accounts are closed in different ways, for example, in Sberbank, a deposit account can be closed through Internet banking, and a card account can only be closed by visiting the company’s representative office. You can only block a card via the Internet, but it is impossible to close an account.
The procedure for closing a credit card account differs from that of a debit card. Often, credit card service agreements provide for its automatic reissue upon expiration. Thus, even without using a credit card, its owner will have to pay a service fee and other paid options connected to the card. If the client decides to completely close the credit card, he must do the following:
- Pay off the balance of the loan and interest.
- Pay all debts on commissions.
- Disable all paid options: SMS notifications, auto-payment, etc.
- Block the card.
- Contact the bank with a request to close the account.
The methods of contacting the bank are also different. For example, at Tinkoff Bank you can close a credit card account by writing an application to the lender’s email or calling the Customer Support Center.
An account can only be closed by the client to whom it is registered or by an authorized representative with a notarized power of attorney.
How to close an account at a bank office
To close an account, the client will need to come to the bank with a passport and contact the manager. The bank employee will check the client’s accounts, the availability of funds in the balance, claims made by judicial or tax authorities. If the account is “clean”, the client simply writes an application and submits it for execution. If there is a balance of funds, a cash receipt order is issued, and the client immediately withdraws them from the bank's cash desk.
If there are claims to the account, you must first pay them off, and then write a statement about closure.
How to close an account in Internet banking
You can close your account online in your personal account. If there is a balance of funds in the account, they should be transferred to another account, then click “Close”. If the option is not available, then you should close the account directly with the credit institution.
In this way, deposit and current accounts and debit cards are closed.
Important! When closing a deposit account early, check the terms of the deposit agreement. The interest rate may be recalculated and interest already paid will be deducted from the investment body.
You should find out how to close an account at the stage of opening it, especially for credit cards. Otherwise, the client risks paying fees on an account that he no longer uses.
Before closing an account, find out if the bank has special offers for clients who wish to terminate the agreement. Often, credit institutions, in order to retain customers, offer favorable discounts or provide free services.
Balance of funds upon closing the current account
The answer to the question whether it is possible to close an account with a positive balance will definitely be negative. This is your organization's money and needs to be taken. In the application for closing an account, you can instruct the bank to transfer the balance to the details in any bank or do it yourself by issuing a payment order. It is possible to receive the balance in cash, but only if it is insignificant.
Advice . If you have made an unambiguous decision to close your account, then leave on it an amount sufficient to pay commissions, and transfer the rest to another account yourself. This will speed up the procedure.
The situation is much more complicated if there is a balance on the account, but the bank insists on closing it, hiding behind the norms of Federal Law 115. Such situations are not at all uncommon lately, especially in small regional banks. However, a transfer to another bank usually involves a considerable commission. If you have fulfilled all the requirements for submitting documents and are not engaged in cash withdrawal, then you can try to get the continuation of the service or at least cancel the commission in court.
How to restore transaction history
The law requires storing documents for at least four years, and accounting rules say even five years. It makes sense to take care of saving all statements in advance. But even after taking all the necessary actions, sometimes data can be lost. In this case, you will have to restore all data through the bank.
It is enough for an individual entrepreneur to personally submit an application for issuing a statement of a closed account by contacting a bank branch with a passport. No problems with obtaining the document arise regardless of whether the activity as an individual entrepreneur continues or it has been terminated.
We advise you to read: Is it possible for an individual entrepreneur to work without a current account and is it needed to conduct business?
If the organization continues to operate, then receiving a statement of a closed account is also not a problem for it. But in case of liquidation there may be problems. If the company was reorganized by merging with another, then you can still try to get an extract by submitting the relevant documents to the bank. In the event of liquidation, for example, bankruptcy, the bank does not have the right to open the data, and it can only be obtained at the request of the court.
Notice of closing a current account in 2021
At the moment, the question of how to notify the tax office about the closure of an account has lost its relevance. In the past, organizations and entrepreneurs were required to send information about opening an account to the Federal Tax Service, Pension Fund and insurance funds. Moreover, only a few days were allotted for this.
From mid-2014, any bank will independently send a notification to the tax office and other government agencies.
If the organization or entrepreneur continues to operate, then it is worth notifying counterparties about changes in details. This is not a requirement, but is highly recommended as it helps avoid mistakes and confusion. But even if someone sends a payment using the old details, where the liquidated account is indicated, nothing bad will happen. The money will be returned to the sender within five days.
Procedure for closing an account for individual entrepreneurs
There are the following reasons for closing a current account:
- a private entrepreneur has ceased his activities;
- change of bank at the request of the client;
- bank liquidation;
- court decision banning profit-making activities.
An individual entrepreneur can hire third-party specialists who will close the account, or carry out the procedure for closing the current account independently.
You need to adhere to the following points:
- submit documents to terminate the agreement with the bank. The manager of the financial institution will provide a list of required papers;
- pay fines and debts to the bank, if any;
- withdraw remaining funds from the account;
- pick up a notice of termination of the service agreement from the bank;
- receive a certificate stating that the account is closed;
- inform the tax authorities, pension and insurance funds about the closure of the current account.
Before the closing procedure, the entrepreneur is obliged to notify partners and counterparties so that there are no problems with transferring funds to non-existent accounts.
After making contributions to insurance and pension funds and paying taxes, if there is no debt to the bank, the current account will be closed, and the private entrepreneur must return the check books back to the bank.
How to pay taxes if your current account is closed
Individual entrepreneurs are not required to have bank accounts. This allows them to pay their taxes in cash and the closed account situation is not a problem for them. It is more difficult for organizations. The position of the Ministry of Finance is that they cannot pay taxes in cash.
If the funds were issued on account, and subsequently the organization received an advance report from an authorized employee (and all the necessary details were indicated in the payment document), then it is permissible to pay taxes in cash through a representative of the company. This is evidenced by some decisions of arbitration courts, as well as instructions of the Constitutional Court. But problems with crediting funds with such payment cannot be avoided. Therefore, it is better to think in advance when the LLC will close its account during liquidation, and not to rush too much.
The bank refuses to close a current account: is it legal?
In fact, the bank does not have the opportunity to refuse to close the account. But in practice, this procedure can be suspended if government agencies have frozen transactions on the account or it has been seized. Usually, account closure becomes possible the next day after debts to the state are paid off and a decision is made to cancel the seizure or suspend the operation.
Before closing the account, the debts must be paid in full, otherwise the account will not be closed. The situation is even more complicated if the bank has an existing loan. It can be drawn up in a separate agreement or as an annex to the general RKO agreement. In any situation, the credit institution will insist on full repayment of the debt before closing the account, even if the loan and cash settlement agreements are not interrelated. The fact is that if there is turnover, the bank receives additional opportunities to collect funds from incoming payments.
Some banks are trying to retain customers by introducing various commissions. In this case, we can only advise you to carefully study the contract and all appendices to it.
Postings when revoking a bank’s license
How to reflect in accounting the creation of a reserve for doubtful debts in relation to the debt of a bank whose license has been revoked?
From the moment of revocation of a credit organization’s license to carry out banking operations, the deadline for fulfilling the obligations of the credit organization that arose before the day of revocation of the said license is considered to have arrived, and the accrual of interest stipulated by the agreement ceases (clauses 1, 2, part 9, article 20 of the Federal Law dated 02.12.1990 N 395-1 “On banks and banking activities”).
How to reflect losses in accounting
To ensure you don't have money on your balance that you probably won't get back, you need to write it off as an expense. This must be done at the expense of the reserve for doubtful debts, which is created in accounting (clause 70 of the Regulations on accounting and financial reporting in the Russian Federation, approved by order of the Ministry of Finance of Russia dated July 29, 1998 N 34n).
First, write off the balance of money in the current account by posting: Debit 76 Credit 51, 52, 55, 58 - the balance of cash and valuables is written off from the account in the bank whose license was revoked. So, on account 76 you will collect the total amount of the bank’s receivables to your organization and reasonably reduce account balances.
Next, you need to accrue a reserve for doubtful debts: Debit 91-2 Credit 63 - a reserve for doubtful debts has been accrued in the amount of debt of the credit institution;
After the liquidation of the bank, you can write off the debt at the expense of the created reserve: Debit 63 Credit 76 - the receivables of the credit institution are written off at the expense of the reserve for doubtful debts based on an extract from the Unified State Register of Legal Entities on the liquidation of the bank.
There is no need to show the receivables of a “busted” bank on the balance sheet. After the bank is declared bankrupt, the amount is written off from the balance sheet as uncollectible and recorded in an off-balance sheet account (perhaps some money will still be received).
For profit tax purposes, money in accounts in a problem bank is not recognized as doubtful debt. This means that it is impossible to accrue a reserve for doubtful debts on the amount of bank debt (even if the tax accounting policy states its creation). The fact is that the bank’s debt is in no way connected with the sale of goods (work, services) of your organization (clause 1 of Article 266 of the Tax Code of the Russian Federation). If your company is included in the register of creditors' claims, then the credit institution's debt can be recognized as uncollectible for profit tax purposes only after the bank has been liquidated. Similar clarifications are contained in Letter of the Ministry of Finance of Russia dated August 10, 2016 N 03-03-06/2/46760. Moreover, even if this happens more than three years from the date of revocation of the license. Since from the day the bankruptcy procedure of the credit organization began, the statute of limitations no longer runs - it has been interrupted (Article 203 of the Civil Code of the Russian Federation). The fact that the bank has been liquidated must be documented. To do this, obtain an extract from the Unified State Register of Legal Entities on the liquidation of the bank.
How to close a current account for an LLC
If a company decides to close its current account, then usually no problems will arise provided there are no debts to the bank. It is enough to submit a complete set of documents and an application to the department. There is no need to notify anyone.
Sometimes an LLC cannot close a current account without a decision from the founders. This feature may be provided for in the company's Charter, and will need to be observed. Another feature is the ability to withdraw the balance only for certain needs, for example, salary, household needs, etc. In practice, it is often easier to transfer balances to another account, even if they are very small.
How and when to close an account during LLC liquidation
When a company is liquidated, the head of the organization is deprived of the right to dispose of funds and close accounts. If the liquidation is voluntary, then these powers will pass to the liquidator or liquidation commission, which the founders must appoint by decision. If liquidation occurs during bankruptcy, then the authority to manage the accounts passes to a bankruptcy trustee appointed by the court.
Additionally, when closing the account of a company that is in the process of liquidation, one of the following documents must be attached:
- minutes of the general meeting of founders or the decision of the sole participant to appoint a liquidator (commission);
- court decision on the appointment of a bankruptcy trustee.
Typically, a bank account should be closed after the liquidation balance sheet is submitted, but before the liquidation of the organization is recorded in the state register. However, the legislation does not regulate this point, and often accounts are closed much earlier, and then they are faced with the problem of paying taxes.
How to close an individual entrepreneur's current account
According to the law, an entrepreneur is not required to have an account. Closing it if necessary will not be difficult. It is enough to submit the appropriate application to the branch and withdraw the remaining cash. Do not forget to return the issued cards and checkbooks to the bank.
There is no need to notify the tax or other government agencies. This is the responsibility of banks, and they will definitely fulfill it. But just in case, you should remember to receive a notice of account closure.
Important ! In some banks, the procedure for closing an account may differ slightly from the standard one, for example, you may need to submit a fresh extract from the Unified State Register of Individual Entrepreneurs, etc. You can clarify this point by reviewing the cash settlement agreement or contacting the manager of the credit institution.
How to close a bank account if there is an outstanding loan
An individual entrepreneur is an individual. Typically, banks can allow you to close a current account even if you have an unpaid loan. Often the loan agreement does not even state whether a particular citizen is an individual entrepreneur. But exceptions are possible.
The bank may insist on full repayment of the loan, for example, if it was issued for certain purposes. This point should be clarified in advance with the employees of the credit institution.
How to close by power of attorney
It is possible to close the account of an individual entrepreneur using a power of attorney, but only if it is notarized and contains instructions on such powers. In this case, the person closing the account will also need his own passport.
Banks really don’t like opening and closing accounts by proxy. In most cases, significantly increased tariffs are provided for such operations. They are associated with the need to verify the power of attorney and possible problems for the bank, the number of which increases significantly when conducting an operation without the personal presence of an individual entrepreneur.
When will the account be closed?
The bank must close the current account no later than the business day following the day the bank account agreement was terminated. If the application for account closure contains a specific date for closing the account, then it must be executed no later than the business day following this date. Provided that the bank received the application before this date - for example, when they decided to send the application by regular mail. This procedure is prescribed in paragraphs 5–6 of clause 1.3 of Bank of Russia Instruction No. 153-I dated May 30, 2014.
The bank is obliged to issue (transfer) to the organization the balance of the money in the account within seven days after receiving the organization’s application (clause 3 of Article 859 of the Civil Code of the Russian Federation, clause 8.3 of the Bank of Russia Instruction No. 153-I dated May 30, 2014). The application form for the issuance (transfer) of the balance of money from a current account upon its closure is not established by law. The bank can enshrine it in its internal rules. If the bank has not provided the organization with the form of such a document, then draw it up in any form. The organization may also require the release or transfer of the balance of money in the application for termination of the bank account agreement.
Advice: notify your counterparties about account closure. After all, if the buyer transfers money to a closed account, it will take time to return it.
