A bank statement (also known as an account statement) is a document (also known as a monthly statement) that is typically sent by the bank to the account holder each month, summarising all of the transactions of an account during the month. Bank statements include information about bank accounts, such as account numbers and a detailed list of deposits and withdrawals.
Before we explain the importance of bank statement. It is importance to understand HOW BANKS LOOK AT THEIR CUSTOMERS or how banks understand their customers.
For bank or bankers, customer is nothing but a reflection of their documentation like:
For Knowing Nationality of Shareholders
To understand employment visa and designation
Trade License is required to understand Business Activity, Length of Business, Shareholders
To know the powers of shareholders
In the end but most important document comes the Company Bank Statement which is to justify the business transactions of company. Transaction pattern in bank statement supports the overall profile of the company and helps bank to easily approve bank accounts. Also, a good bank statement helps companies from the hassle of regular calls from compliance related to daily transactions.
Although all below points depend on business activity. Still, can be red flag for bank statement.
Statements or Businesses with high cash deposit raises a red flag for compliance. It’s a known fact, that cash deposit is means of converting dirty money to clean money or we call it from black to white. Businesses which generate a lot of cash are not much supported by banks unless it is supported activity and proper documentation.
DO’S - How much cash is good for an account - Well the answer to that question isn’t that simple. However, as per normal bank policies it shouldn’t exceed more than 20% of total monthly turnover of account.
Depositing big value cash in one transaction raises an immediate compliance flag of STR (suspicious transaction).
DO’S - It is recommended to deposit regular cash as soon as it is generated rather than holding it and depositing together.
Account activities which have immediate deposit and withdrawal activities raises a red flag to compliance as it signifies that the cash was deposited by someone and withdrawn by company just to convert black to white or for Hawala.
DO’S - It is recommended not to withdraw full amount immediately after deposit full amount. As per normal bank policies, 75% of deposit should be withdrawn.
Receiving funds through local transfers are considered safe as there are easily traceable. However, the points to note here are that the transfer should match your business activity. Also, sometimes the other party might be blacklisted in bank in that case bank will notify you. Make sure next time you do transaction with that party.
Account statements with high remittances are good for banks in terms of Foreign Exchange Income and Trade Income. However, the documentation in those transaction is difficult to trace for those banks as they ask for invoice and bill of lading.
Don’ts – Make sure your account doesn’t have transactions from Sanction Countries (Iran, Sudan and Syria). In case any transaction from these countries account might close immediately close account with sending the funds back as well.
Accounts statements with cheque returns are not supported by banks. As the company defaulting on payments to its parties are come under strict central bank regulation of any country.
Don’ts – As per bank policy, company shouldn’t have more than 3 cheque returns in one year and more than 1 return in every 6 months. Do’s – Maintain a healthy average balance in the account to avoid any cheque return. And in case if happens due to accounting issues. A good average balance all the time can support the cheque return.
Banks are very strict in cases of DDS returns as it is a loan of bank and creates a very bad history of the company. Make sure not to default on any loan mistakes by any chance.
A bank sends an account holder a bank statement that details the account's activity. It enables the account holder to view all transactions made on their account. On a regular basis, banks send monthly statements to account holders. Furthermore, transactions on a statement are typically displayed in chronological order. As a result, it is required to open a Business Account in the UAE.
Open business bank account online in Dubai, UAE. Compare and apply for business bank account from leading banks with Dhanguard.
Open business bank account online in Dubai, UAE. Compare and apply for business bank account from leading banks with Dhanguard.
There are a number of reasons why a bank will call you or demand your physical appearance in their branches to fulfill some of the formalities. And.. Read More
When a firm wishes to open a bank account, it must first pass a board resolution, which is known as a board resolution for bank account opening. Th.. Read More
A correspondent bank is a financial institution that acts on behalf of another bank or financial institution, normally in another country, to provi.. Read More
To ensure that copies submitted are accurate, exact, complete, and unaltered, true copies (or certified copies) of original documents are frequentl.. Read More
Yes, a foreign entity can open business account in the UAE. The registration of any organisation in the UAE is generally an easier and cost-effective way.
The requirement for opening any bank account in the UAE vary from one bank to another. Although, the existence of a major director or shareholder is generally required.
A limited company should have a dedicated bank account because they have a separate legal entity.
The benefits of having business account includes tracking of the expenses, easy calculation of the tax liabilities as well as management of cash flow.
Yes you can open a business account in various major currencies of the world other than the UAE dirhams.
All the information on this website is published in good faith and for general information purpose only. Dhanguard does not make any warranties about the completeness, reliability and accuracy of this information. Any action you take upon the information you find on this website, is strictly at your own risk. DhanGuard will not be liable for any losses and/or damages in connection with the use of our website.
By using our website, you hereby consent to our disclaimer and agree to its terms.
Should we update, amend or make any changes to this document, those changes will be prominently posted here.
Copyright @2021 Design & Developed by Team Dhanguard