Banking & Money Operations

The man with four bank accounts

It's a Thursday morning at Bhandari uncle's hardware shop in Haldwani. A contractor named Dinesh has just loaded ₹38,000 worth of cement and TMT bars onto his pickup truck. He pulls out his phone.

"UPI kar deta hoon, Bhandari ji."

Bhandari uncle pauses. "Kaunsa account mein? SBI wala ya PNB wala?"

Dinesh looks confused. "Aapke paas kitne accounts hain?"

Bhandari uncle sighs. "Char. SBI mein savings — woh purana wala hai, family ka. PNB mein savings — woh dukaan ke liye khola tha lekin savings hi hai. Bank of Baroda mein current account — woh CA ne bola tha toh khol diya. Aur ek Jan Dhan wala bhi hai kahin. UPI teen account se linked hai. Kabhi paisa idhar aata hai, kabhi udhar. End of month mein samajh nahi aata kitna kamaya, kitna kharch hua."

He pulls out a crumpled paper from the drawer — a printout of last month's SBI statement. There are 47 UPI transactions, 3 NEFT credits, and a dozen cash deposits. Half the entries he can't even identify.

"Mera CA pagal ho jata hai," Bhandari uncle admits.

If Bhandari uncle's situation sounds familiar, you're not alone. Most small business owners in India have a messy relationship with banking. Multiple accounts opened over the years, UPI payments landing in the wrong account, personal and business money mixed together, bank statements that look like a foreign language.

This chapter will fix that. We'll cover everything a small business owner needs to know about banking — from choosing the right account to understanding UPI, managing cheques, reading your bank statement, and avoiding the mistakes that cost you money and give your CA headaches.

Why banking matters for your business

You might think: "I've had a bank account since I was 18. I know how banks work."

But there's a difference between using a bank as a person and using a bank as a business. Here's why it matters:

1. Separation of personal and business money. If your business money and household money are in the same account, you will never know your true business profit. Ever. It's the single biggest financial mistake small business owners make.

2. Legal compliance. Once your business crosses certain revenue thresholds, you need a current account. You need proper records. Banks provide those records automatically — if you set things up right.

3. Credit history. Want a business loan someday? Banks look at your account history. A well-maintained business account with steady transactions builds a credit profile. A messy personal savings account doesn't.

4. Tax filing. Your CA needs clean records. Your bank statement is one of the primary documents for ITR filing. If personal and business transactions are mixed, untangling them is painful and expensive.

5. Customer trust. When a customer makes a payment to "M/s Bhandari Hardware" instead of "Ramesh Bhandari," it looks more professional. It builds trust, especially with larger clients and government contracts.

Types of bank accounts for business

Savings Account

This is what most people have. You opened it with your Aadhaar and PAN card. You get 3-4% interest on your balance. You can do a limited number of free transactions per month. There's usually a minimum balance requirement of ₹1,000-5,000.

Can you run a business from a savings account?

Technically, for a very small business — yes. Pushpa didi's chai stall runs on her savings account. She gets maybe ₹15,000-20,000 in UPI payments per month. The rest is cash. Nobody is going to come after her for using a savings account.

But here's the thing: banks officially don't allow regular commercial transactions in savings accounts. If they notice high-frequency business transactions — lots of UPI credits from different people, large daily deposits — they can ask you to convert to a current account. Some banks have actually frozen savings accounts for this reason.

Current Account

This is the real business account. Here's how it's different:

When must you switch to a current account?

• When your annual turnover crosses ₹20 lakh (if services) or ₹40 lakh (if goods) — because you'll need GST registration, and GST returns need a current account
• When you're dealing with B2B clients who want to pay via NEFT/RTGS to a business name
• When you want a business loan or overdraft facility
• When your CA tells you to — listen to your CA

Bhandari uncle's CA, Mishra ji in Haldwani, finally sat him down: "Bhandari sahab, ek kaam karo. SBI savings — woh ghar ka account hai, wahan sirf ghar ka paisa. PNB savings — band karo ya ghar walon ko de do. Bank of Baroda current account — woh aapka dukaan ka account hai. Sab business ka paisa wahan. UPI bhi sirf ussi se link karo. Jan Dhan wala — woh to subsidy ke liye hai, usse chhedna mat."

"Lekin SBI mein bahut saare customers ka UPI aa chuka hai..."

"Isliye bol raha hoon — ab se sab current account mein. Purana toh purana, ab aage se theek karo."

Other account types you should know about

Fixed Deposit (FD): You lock money for a fixed period (3 months to 5 years) and earn higher interest (6-7.5%). Good for parking surplus business cash that you won't need for a few months. Some businesses keep 2-3 months of operating expenses in an FD as an emergency reserve.

Recurring Deposit (RD): You deposit a fixed amount every month. Good for building up a reserve for known future expenses — like tax payments, annual license renewals, or equipment replacement.

Flexi-deposit / Sweep-in account: Some banks offer current accounts where any balance above a threshold automatically moves into an FD and earns interest. When you need the money, it sweeps back. Best of both worlds if your bank offers it.

Opening a business bank account

Documents you'll need

The exact list depends on the type of business, but here's what's typically required:

For a Sole Proprietorship (most small shops, stalls, freelancers):

• PAN card of the owner
• Aadhaar card of the owner
• Business address proof (electricity bill, rent agreement, or property papers of the shop)
• GST registration certificate (if registered)
• Udyam Registration certificate (formerly MSME registration — free to get online)
• Shop & Establishment Act registration (from your municipal body)
• Two passport-size photos
• A business letter or visiting card (some banks ask for this)

For a Partnership Firm:

• All of the above, plus:
• Partnership deed
• PAN card of the firm
• PAN and Aadhaar of all partners

For an LLP or Private Limited Company:

• Certificate of Incorporation
• PAN of the company/LLP
• MOA and AOA (for company) / LLP Agreement
• Board resolution for opening the account
• PAN and Aadhaar of directors/partners
• Registered office address proof

Neema and Jyoti's homestay in Munsiyari is a partnership between the two of them. When they went to the local SBI branch to open a current account, the branch manager asked for their partnership deed. They didn't have one — they were running on a handshake agreement.

"We had to go back, get a partnership deed drafted by a lawyer in Pithoragarh — cost us ₹3,000 — get it notarized, then come back to the bank," Neema recalls. "It took three trips and two weeks. If we'd known upfront, we'd have been ready on day one."

Pro tip: Before visiting the bank, call the branch and ask for their specific list. Different branches of the same bank sometimes ask for slightly different documents. One trip with all papers is better than three trips with missing papers.

Choosing the right bank

This is a bigger decision than most people realize. Here are the factors:

1. Branch proximity. For a small business in Uttarakhand, this matters more than it does in a metro city. You'll need to visit the branch for cheque deposits, cash deposits, document submissions, and resolving issues. If your nearest branch is 30 km away, every banking task becomes a half-day affair.

Rawat ji's apple orchard is near Ranikhet. The nearest SBI branch is in the market area, about 8 km from his orchard. But the nearest private bank branch (ICICI, HDFC) is in Almora — 50 km away. For him, SBI makes more practical sense, even if the private bank has a better app.

2. Digital banking quality. How good is the bank's mobile app? Can you check your balance, download statements, set up NEFT/RTGS, manage beneficiaries, all from your phone? In 2024, this matters a lot. SBI's YONO app has improved significantly. HDFC, ICICI, and Kotak have excellent apps. Some cooperative and regional rural banks still have clunky or no digital banking.

3. Business-friendly features. Does the bank offer:

• Cash deposit machines (CDMs) for after-hours deposits?
• A business banking helpline?
• SMS/email alerts for every transaction?
• Easy cheque book requests?
• Integration with accounting software like Tally?

4. Loan and credit facilities. If you'll need a business loan, overdraft, or CC (cash credit) facility in the future, it's easier to get from a bank where you already have a healthy current account history. PSU banks (SBI, PNB, BOB) are generally easier for MSME loans. Private banks have faster processing but can be stricter on documentation.

5. Charges. Compare:

• Minimum balance requirement
• Cheque book charges
• NEFT/RTGS charges (most are free now, but check)
• Cash handling charges (if you deposit a lot of cash, some banks charge above a limit)
• Annual account maintenance charges

Our recommendation for most small businesses in Uttarakhand: Open your primary current account at a PSU bank (SBI, PNB, or Bank of Baroda) that has a branch close to your business. If you want better digital banking, open a secondary current account at a private bank (HDFC, ICICI, or Kotak) for online transactions. But keep one account as your primary — the one your CA works with, the one linked to GST, the one on your invoices.

UPI, digital payments, and QR codes

Pushpa didi's digital journey

Two years ago, Pushpa didi's chai stall near Triveni Ghat in Rishikesh was cash-only. Tourists would ask, "UPI hai?" and she'd shake her head. Some would walk away. Her nephew Arjun, visiting for the weekend, set up PhonePe on her phone in 15 minutes.

"Now 40% of my payments come through UPI," she says. "Especially tourists and the young crowd. They don't carry cash. Pehle ₹20 ki chai ke liye 'change nahi hai' ka drama hota tha. Ab phone se aa jata hai — exact amount."

She keeps her phone behind the counter with the sound on. Every time money arrives, the PhonePe voice says, "₹20 received." She doesn't need to check the screen. She can keep making chai.

"Sabse achhi baat? Cash chori hone ka dar nahi. Pehle raat ko drawer mein ₹3,000-4,000 hota tha. Ab zyada paisa seedha bank mein jaata hai."

How UPI works (the simple version)

UPI (Unified Payments Interface) connects your bank account to an app on your phone. When a customer scans your QR code or sends money to your UPI ID, the money moves directly from their bank account to your bank account. No middleman. No waiting. No charges (for now — more on this below).

What you need to accept UPI payments:

1. A smartphone with internet
2. A bank account
3. A UPI app (PhonePe, Google Pay, Paytm, BHIM, or your bank's own app)

Personal UPI vs Business UPI:

This is important and most small business owners don't know the difference.

How to get a merchant/business QR code:

• Through your bank (ask for a "UPI merchant" or "QR code for business")
• Through payment aggregators like Paytm for Business, PhonePe Business, BharatPe, Pine Labs
• BharatPe is popular because it works with all UPI apps — customer can pay from any app, money comes to your account

Bhandari uncle got a BharatPe QR code installed at his billing counter. "Best part — it works with all apps. Customer chahe Google Pay use kare ya PhonePe ya Paytm — mera ek QR code se sab kaam ho jaata hai. Aur BharatPe ka app mein mujhe poora report milta hai — kitne transactions hue, kitna total aaya, daily/weekly/monthly."

Important UPI tips for businesses

1. Keep the QR code visible and clean. Stick it at the billing counter where customers can easily scan it. Laminate it so it doesn't get damaged. If it gets scratched or faded, replace it immediately — a bad scan means a lost payment.

2. Always verify payment received. Don't just look at the customer's screen showing "Payment Successful." Check your own phone or app for the credit notification. Fake payment screenshots are a real scam.

3. Set up instant notifications. Make sure your UPI app sends immediate push notifications and SMS for every transaction. Pushpa didi uses the audio notification — she hears every payment come in.

4. Download your UPI transaction report monthly. Most apps let you download a CSV or PDF report. Give this to your CA. It's a record of every digital transaction.

5. Separate personal and business UPI. If possible, use one phone for business UPI (linked to your current account) and another for personal UPI (linked to your savings account). If two phones aren't practical, at least use different UPI apps — PhonePe for business, Google Pay for personal, for example.

6. Daily reconciliation. At the end of every day, check: do the UPI payments received match what you recorded in your sales register? It takes 5 minutes and saves massive headaches later.

NEFT, RTGS, IMPS — when to use what

These are the three main ways to transfer money between bank accounts in India (apart from UPI). You'll use them for larger payments — paying suppliers, receiving from B2B clients, transferring between your own accounts.

When to use which:

• Paying your supplier ₹45,000 for a stock order? NEFT. Free, and it'll reach in an hour or so.
• Paying ₹3.5 lakh for a bulk cement order that needs to be confirmed immediately? RTGS. It's real-time and meant for large amounts.
• Need to transfer ₹15,000 to your helper's account at 9 PM on a Sunday? IMPS. It works 24/7.
• Customer wants to pay ₹28,000 for hardware material? UPI is fine for this amount. But if it's a B2B client who prefers bank transfer, NEFT works.

Rawat ji sells apple crates to a distributor in Delhi. The distributor pays ₹2-4 lakh at a time. "Pehle cheque bhejta tha — 3-4 din lag jaate the clear hone mein. Ab RTGS karta hai. Subah order confirm, dopahar tak paisa account mein. Mujhe fir se next consignment ki tayaari kar sakte hain bina tension ke."

What information you need for NEFT/RTGS/IMPS:

• Beneficiary's full name (as in bank records)
• Bank account number
• IFSC code of the beneficiary's branch
• Account type (savings/current)

Pro tip: Most banks let you add beneficiaries through mobile banking. Add your regular suppliers and recipients as saved beneficiaries so you don't have to enter details every time. But always double-check the account number before a large transfer. One wrong digit = money sent to the wrong person, and getting it back is a nightmare.

Cheque management

In the age of UPI and NEFT, you might wonder: "Do cheques still matter?"

Yes. Especially for:

• Rent payments (many landlords prefer cheques)
• Government payments and certain tax deposits
• Security deposits
• Large B2B transactions where a paper trail is needed
• Post-dated cheques as payment guarantees

How cheques work

A cheque is a written instruction from you to your bank: "Pay this person ₹X from my account." When the recipient deposits the cheque in their bank, the two banks communicate through a clearing system, and money moves from your account to theirs. This takes 1-3 working days.

Types of cheques:

• Bearer cheque: Anyone holding the cheque can encash it. Risky. Avoid unless necessary.
• Order cheque / Account payee cheque: Can only be deposited into the account of the person named on the cheque. Safer. Always write "A/c Payee" or cross the cheque with two parallel lines.
• Post-dated cheque (PDC): Dated for a future date. Can't be deposited before that date. Used as a payment guarantee — "I'll pay you ₹50,000 on the 15th of next month."

Post-dated cheques in business

Bhandari uncle uses post-dated cheques regularly. "When I buy stock worth ₹2-3 lakh from my distributor, I sometimes give two or three post-dated cheques — one for 15 days, one for 30 days, one for 45 days. The distributor keeps them. As each date comes, he deposits the cheque. It's like an installment plan built on trust."

"The other side too — when I give ₹1 lakh credit to a big contractor, I take a post-dated cheque from him. If he doesn't pay in cash by the date, I deposit the cheque. It's my safety net."

Important rules for cheques:

1. A bounced cheque is serious. If you issue a cheque and your account doesn't have enough money when it's deposited, the cheque "bounces." This is not just embarrassing — under Section 138 of the Negotiable Instruments Act, a bounced cheque is a criminal offence. You can be fined and even jailed. Never issue a cheque unless you're sure the money will be in your account on the date.

2. Keep a record. Maintain a cheque register — a simple notebook or spreadsheet listing every cheque you issue: cheque number, date, to whom, for what amount, and when it was cleared. Same for cheques received.

3. Cheque validity. A cheque is valid for 3 months from the date written on it. After that, it's "stale" and the bank won't honor it. If you're holding a customer's old cheque, deposit it before it expires or ask for a fresh one.

4. Stop payment. If you've issued a cheque but want to cancel it (before it's deposited), you can instruct your bank to "stop payment" on that cheque number. There's usually a fee of ₹50-100.

Bank statements and reconciliation

Reading your bank statement

A bank statement is a record of every transaction in your account over a period. You can download it as a PDF or Excel file from your bank's app or net banking portal.

A typical bank statement has these columns:

Common abbreviations in bank statements:

• UPI — UPI payment (shows sender/receiver and reference)
• NEFT/RTGS/IMPS — Bank transfers
• CHQ DEP or CLG — Cheque deposited/clearing
• ATM WDL — ATM cash withdrawal
• INT — Interest credit/debit
• EMI — Loan installment deducted
• CHRGS or SC — Service charges deducted by the bank
• GST — GST charged on banking services

Bank reconciliation — matching your records with the bank's

This is one of the most important habits a business owner can develop, and one of the most neglected.

What is bank reconciliation?

It's the process of comparing your own records (your cash book, sales register, expense register) with your bank statement to make sure they match. Where they don't match, you find out why.

Why do mismatches happen?

• A cheque you deposited hasn't cleared yet (it's in your records as income, but the bank hasn't credited it)
• A cheque you issued hasn't been deposited by the recipient yet (it's in your records as an expense, but the bank hasn't debited it)
• Bank charges or fees you didn't record
• An auto-debit you forgot about (loan EMI, insurance premium)
• A UPI payment that failed but the customer thinks it went through
• A duplicate payment
• An error — yours or the bank's

Ankita does bank reconciliation every Sunday evening. "Pehle nahi karti thi — month end par CA ko sab de deti thi. Ek baar ₹18,000 ka UPI payment ek customer se double charge ho gaya. Customer ne complaint ki tab pata chala. Bank ne refund kiya but it took 10 days. Since then, I check every week."

How to do basic bank reconciliation:

1. Download your bank statement for the month (PDF and Excel both — Excel is easier to work with)
2. Open your own records — your sales register, expense register, or accounting software
3. Go through each bank transaction and tick it off against your records
4. Mark any unmatched items — transactions in the bank statement not in your records, or items in your records not in the bank statement
5. Investigate each mismatch — is it a timing difference (cheque not yet cleared), a forgotten expense (bank charges), or an actual error?
6. Update your records where needed

For a small business doing 50-100 transactions a month, this takes about 30-60 minutes monthly. It's worth every minute.

Pro tip: If you use accounting software like Tally, Zoho Books, or Khatabook, many of them can import your bank statement and auto-match transactions. This cuts the work in half.

Credit and debit cards for business

Business debit card

When you open a current account, you'll usually get a debit card. This works like your personal debit card — you can withdraw cash from ATMs and make purchases — but it's linked to your business account.

Uses:

• Buying supplies from shops that accept cards
• Online purchases for business (printer ink, stationery, courier bookings)
• Cash withdrawal when you need to pay someone in cash

Tip: Set a daily withdrawal and spending limit on your business debit card. This protects you if the card is lost or stolen. Most banks let you adjust limits through the app.

Business credit card

A business credit card is separate from your personal credit card. It has a credit limit based on your business's financial health, and all expenses on it are business expenses — making accounting cleaner.

Advantages:

• Interest-free credit period: Typically 20-45 days. If you buy ₹30,000 worth of supplies on the 5th of the month and pay the bill by the 25th of next month, you've used the money for 50 days without paying interest. That's free short-term financing.
• Expense tracking: Monthly credit card statement gives you a ready list of all business expenses.
• Rewards and cashback: Some business credit cards give 1-2% cashback on purchases, fuel surcharge waivers, or reward points. On ₹1 lakh monthly spending, that's ₹1,000-2,000 saved.
• Build credit history: Regular, on-time credit card payments improve your business's credit score (CIBIL), which helps when you apply for loans.

Dangers:

• High interest on unpaid balance: If you don't pay the full amount on time, credit cards charge 2.5-3.5% PER MONTH — that's 30-42% per year. Never carry a balance on a credit card. Ever.
• Temptation to overspend: Having a ₹2 lakh credit limit doesn't mean you have ₹2 lakh. It means the bank is willing to lend you ₹2 lakh at brutal interest rates if you don't pay on time.

Vikram uses an HDFC Business Credit Card for his franchise expenses — raw materials, packaging, equipment repairs. "I put everything on the card and pay full amount before due date. I get 45 days of free credit, a clean expense record, and about ₹1,500 in rewards every month. But the rule is simple — if I can't pay the full bill, I don't swipe the card."

Business loans basics

We'll cover business funding in detail in the Funding chapter. But since we're talking about banking, here's a quick overview of what banks offer:

Types of business loans

Term Loan: You borrow a fixed amount and repay it in EMIs over a fixed period (1-7 years). Used for buying equipment, expanding your shop, purchasing a vehicle.

• Example: Bhandari uncle took a ₹5 lakh term loan from SBI to renovate his shop. EMI: ₹11,500/month for 5 years.

Working Capital Loan: Short-term loan to manage day-to-day cash flow — buying stock, paying wages, covering expenses until customer payments come in.

• Example: Rawat ji takes a ₹3 lakh working capital loan every June to pay for seasonal workers and packaging before the apple harvest in August-September. He repays it by November after selling the produce.

Mudra Loan (PMMY): Government-backed loans for micro and small businesses. Three categories:

• Shishu: Up to ₹50,000
• Kishor: ₹50,001 to ₹5 lakh
• Tarun: ₹5 lakh to ₹10 lakh

No collateral needed. Interest rates are reasonable (8-12%). If you're starting a small business or need a small loan, Mudra is often the best first option.

MSME loans (Stand-Up India, CGTMSE): Various government schemes offering loans with low interest rates and sometimes partial guarantees so you don't need collateral. Your bank or the Udyam portal can guide you.

What banks look at before giving a loan

• Your business's bank statement (6-12 months of healthy transactions)
• ITR (Income Tax Returns) for the last 2-3 years
• CIBIL score (750+ is good)
• Collateral (property, FD, etc. — not needed for Mudra)
• Business vintage (how long you've been running)
• GST returns (if applicable)
• A proper business plan (especially for larger loans)

"When I applied for my Mudra loan," Pushpa didi says, "the bank wanted six months of bank statement. Thank God Arjun had set up UPI — all my transactions were showing in the statement. If it was all cash, bank would have said 'aapka turnover dikhta nahi.' Digital payments actually helped me get the loan."

Overdraft (OD) facility

An overdraft is like a pre-approved loan attached to your current account. The bank allows you to withdraw more money than you have — up to a certain limit.

How it works:

• Your current account has ₹50,000.
• Your OD limit is ₹2,00,000.
• You can withdraw or pay up to ₹2,50,000 (your balance + OD limit).
• You pay interest only on the amount you actually use, and only for the days you use it.

Example:

Bhandari uncle has a ₹3 lakh OD on his Bank of Baroda current account. In the lean season (June-July), his account balance drops to ₹10,000 but he needs to buy ₹1.5 lakh worth of stock for the monsoon construction season. He uses ₹1,40,000 from his OD. As customers pay in August-September, money comes back in and the OD balance goes back to zero.

"Interest sirf utne din ka lagta hai jitne din maine OD use kiya. Agar ₹1.4 lakh, 45 din ke liye, at 11% interest — that's roughly ₹1,900. A term loan would've been more complicated and the interest for the full year."

OD interest calculation:

• OD interest rate: typically 10-14% per annum
• Interest is calculated daily on the outstanding amount
• It's one of the cheapest forms of short-term business financing

How to get an OD:

• Apply through your bank where you have a current account
• Banks usually offer OD against collateral (property, FD) or based on your business turnover
• OD against FD is easiest — if you have a ₹5 lakh FD, the bank may give you a ₹4-4.5 lakh OD against it, at FD interest rate + 1-2%
• OD is renewed annually — the bank reviews your account and decides whether to continue

OD vs Loan — when to use which?

Common banking mistakes small businesses make

Over 22 years, Bhandari uncle has seen — and made — most of these. Let's learn from them.

1. Mixing personal and business money

The number one mistake. We've said it before, we'll say it again: keep them separate. One current account for business. One savings account for personal. Money moves between them only as a proper "owner's drawing" or "capital infusion."

2. Not checking bank statements

"Statement download karke kya karun? CA ko de deta hoon." — This is how errors go undetected for months. Bank charges you didn't authorize, duplicate debits, failed refunds — they only get caught if you look.

3. Issuing cheques without sufficient balance

We covered this above. A bounced cheque is a criminal offence. It also destroys your reputation with suppliers and your credit score with the bank. Always maintain enough balance to cover every outstanding cheque.

4. Not maintaining minimum balance

Banks charge ₹300-600 per quarter for non-maintenance of minimum balance in current accounts. Over a year, that's ₹1,200-2,400 — money wasted for no reason. Know your minimum balance requirement and maintain it.

5. Ignoring bank charges

Banks charge for lots of things: SMS alerts, cheque books, cash handling, demand drafts, account statements. These small charges add up. Review your statement for "CHRGS" or "SC" entries. Some charges can be negotiated or waived — especially if you maintain a good average balance.

6. Not keeping multiple signatories updated

If you have a partnership or company, make sure all authorized signatories are current. If a partner leaves and their name is still on the bank mandate, it creates legal complications.

7. Cash deposits without source documentation

If you deposit ₹50,000 or more in cash in a single day, the bank reports it to the Income Tax department. This is normal and legal — but you should have documentation showing where that cash came from (daily sales records, cash memos, etc.). Large unexplained cash deposits can trigger an IT notice.

8. Not using digital banking

If you're still going to the branch for every transaction — standing in queue for NEFT, submitting physical forms for fund transfers — you're wasting hours every week. Learn your bank's app. It takes one afternoon to learn and saves hundreds of hours over the years.

9. Taking loans you don't need

"Bank offered 10 lakh loan, so I took it." Bad logic. Loans cost money (interest). Only borrow what you need, when you need it, for a clear purpose.

10. Not building a relationship with your bank manager

This is old-school advice, but it works. Know your branch manager by name. Visit occasionally. A good relationship means faster loan processing, quicker issue resolution, and sometimes a phone call warning when something's wrong with your account.

Bhandari uncle's advice: "Bank manager ko Diwali pe mithai zaroor bhejta hoon. Not rishtaa — lekin ek relationship. When my cheque book got stuck in the system for two weeks, ek phone call mein solve ho gaya. Warna 'complaint register mein likh dijiye' ka raag sunna padta."

Digital banking tools and apps

In 2024, your phone is your bank branch. Here are the tools every small business owner should know about:

Bank apps

• SBI YONO — SBI's mobile banking app. Check balance, transfer money, download statements, request cheque book, apply for loans, pay bills.
• HDFC Mobile Banking / ICICI iMobile / Kotak 811 — Private bank apps with excellent interfaces. Feature-rich and reliable.
• PNB One — PNB's app. Basic but works.

UPI and payment apps

• PhonePe / Google Pay / Paytm — For receiving and making UPI payments. Most business owners in Uttarakhand use PhonePe.
• BharatPe — Business-focused. One QR code for all apps. Offers small business loans too.
• BHIM — Government's official UPI app. Basic and reliable.

Accounting-linked banking

• Khatabook / OkCredit — Digital udhar (credit) management. Record who owes you, who you owe. Send payment reminders via WhatsApp. Not a bank, but works alongside your banking.
• Zoho Books / Tally (on cloud) — If your business is growing, these can connect directly to your bank account and auto-import transactions.
• Vyapar — GST invoicing app popular with small businesses. Can track payments received against invoices.

Government portals

• Udyam Registration (udyamregistration.gov.in) — Free MSME registration. Helps with bank loans and government scheme eligibility.
• CIBIL (cibil.com) — Check your credit score. Every adult should check this once a year. It's free once a year.
• TReDS (Trade Receivables Discounting System) — If you supply to large companies, you can get your invoices financed through this platform. More relevant as you grow.

Security tips for digital banking

1. Never share OTP with anyone. Not the bank, not "customer care," not anyone who calls saying there's a problem with your account. Banks never ask for OTP on phone calls.
2. Use a screen lock on your phone. If your phone is stolen and it's unlocked, someone can clean out your account in minutes.
3. Enable two-factor authentication on your banking apps.
4. Don't click links in SMS or WhatsApp messages claiming to be from your bank. Always open the official app directly.
5. Set transaction limits on UPI and debit card. You can increase them when needed and reduce them afterward.
6. Monitor SMS alerts. If you get a transaction alert you didn't authorize, call the bank immediately. You have a limited window (usually 3-7 days) to report unauthorized transactions and get your money back.

Neema received a call: "Ma'am, your SBI account will be blocked. Please share your OTP to verify." She almost gave it. Then she remembered — the bank branch is right there in Munsiyari. She walked in and asked. The branch manager said, "That's a scam. We never call and ask for OTP. You did the right thing coming here."

Putting it all together — Bhandari uncle's banking cleanup

Six months after Mishra ji's advice, Bhandari uncle's banking is transformed:

Current account (Bank of Baroda): All business transactions. UPI linked here. All supplier payments via NEFT from here. All customer payments — UPI, cheques, NEFT — come here. GST and tax payments from here. OD facility of ₹3 lakh attached.

Savings account (SBI): Personal and family use only. Salary (owner's drawing) of ₹40,000 transferred from the current account on the 1st of every month via NEFT.

FD (Bank of Baroda): ₹5 lakh parked as emergency reserve and OD collateral.

Jan Dhan account: Kept open for government subsidy linkage. No business transactions.

PNB savings: Closed.

Every Sunday, he spends 20 minutes reviewing the week's UPI transactions on BharatPe and matching them with his billing register. Once a month, he downloads the Bank of Baroda statement and gives it to Mishra ji.

"Pehle char account mein paisa ghoomta tha aur kuch samajh nahi aata tha. Ab ek hi account dekhna hai. CA khush, meri wife khush, tax filing aasan. Shuru mein thoda effort laga, but ab bohot simple hai."

Chapter checklist

Before you move on, make sure you've done (or planned) the following:

• Opened a current account for your business (or decided when you will)
• Separated personal and business banking completely
• Set up a business UPI/merchant QR code
• Identified which bank is best for your location and needs
• Learned to download and read your bank statement
• Started a basic reconciliation habit (weekly or monthly)
• Saved your regular suppliers/recipients as beneficiaries for NEFT
• Set up security measures on your banking apps (screen lock, OTP awareness, transaction limits)
• Checked your CIBIL score at least once

In the next chapter, we explore business funding in depth — where the money comes from to start and grow a business. Loans, government schemes, angel investors, bootstrapping — and which option is right for your situation. Rawat ji needs ₹8 lakh for a cold storage unit. Ankita wants to hire two people and scale her D2C brand. Vikram is thinking about a second franchise outlet. Same question, different answers.