Request Letter for Closing Company Bank Account & Fund Transfer

Every company, whether small, medium, or large, may at some point need to close a bank account due to operational restructuring, change of banking partner, merger of accounts, or business discontinuation. Bank account closure is a formal process that requires written communication from the company’s authorized signatories. The “Request Letter for Closing Company Bank Account and Fund Transfer” is a crucial document that initiates the closure procedure and ensures compliance with regulatory and internal control standards. This letter acts as both a formal declaration of closure intent and a legally recorded instruction to transfer remaining funds to another specified account.
            

2. Purpose and Importance of the Request Letter

The primary purpose of the request letter is to inform the bank, in writing, about the company’s decision to discontinue an existing bank account. This ensures transparency and prevents unauthorized operation of the account after closure. The letter also serves as a crucial safeguard for the company, documenting the transfer of remaining balances to a designated bank account. Banks require explicit, authorized written instructions to mitigate the risk of disputes, miscommunication, or unlawful withdrawals.
Furthermore, a well-drafted request letter strengthens compliance with corporate governance standards by offering documentary proof of authorization and internal approvals, usually supported by a Board Resolution.
            

3. Reasons for Closing a Company Bank Account

A company may choose to close a bank account for various reasons. Common reasons include operational streamlining, consolidation of multiple business accounts, migration to a preferred banking partner offering better service, switching to digital banking platforms, or closure of a business division. Additionally, account closure becomes necessary during corporate restructuring events such as mergers, acquisitions, conversion of company structure, or winding up of the business. When a company ceases operations or shuts down a specific branch or unit, closing redundant bank accounts helps reduce maintenance charges, compliance costs, and administrative burdens.
            

4. Legal and Compliance Framework

Closing a company bank account is not merely an administrative task; it is a compliance-driven process. Banks require authorized instructions under the company’s Articles of Association, Board Resolution, and KYC norms. The bank must verify the identity of signatories, confirm that all outstanding obligations have been settled, and ensure that the account is free from disputes, overdrafts, charges, or legal holds.
Regulatory guidelines require banks to maintain audit trails of account closure requests. The signed request letter becomes part of the company’s permanent record, demonstrating that closure was duly authorized and carried out with full consent. Supporting documents such as PAN, incorporation certificate, resolution, and signatory proofs are mandatory for preventing misuse or unauthorized termination.
            

5. Structure and Components of the Request Letter

A request letter for closing a company bank account must follow a professional and structured format. It generally includes essential elements such as the date, bank branch details, subject line, company identity, and formal instructions.
The letter must clearly specify the account number, type of account, and customer identification number to avoid ambiguity. It should state the purpose for closure and request the bank to transfer the remaining balance to a designated account, providing full beneficiary details like account number, bank name, branch, and IFSC code.
To ensure compliance, the letter must contain an authorized signatory’s signature, designation, and company stamp. The tone should remain formal and courteous throughout, acknowledging the bank’s support and expressing willingness to provide additional documentation if required.
            

6. Importance of Fund Transfer Instructions

One of the essential components of the closure letter is the instruction for transferring remaining funds from the account. Since companies typically operate multiple accounts, clear fund-transfer instructions help avoid errors and ensure seamless continuity of business operations.
Providing detailed beneficiary information, such as account name, account number, branch, and IFSC code, helps the bank prevent mistakes and enables a smooth transition. The letter also serves as written consent for the bank to close the account only after transferring the balance, thereby eliminating any potential liability on either side.
            

7. Supporting Documents Required

A request letter for account closure must be accompanied by supporting documents to validate the company’s authority and ensure proper due diligence. Common attachments include a certified Board Resolution approving the account closure, KYC documents of authorized signatories, PAN of the company, Certificate of Incorporation, and a Cancelled Cheque of the recipient account.
These documents strengthen the authenticity of the instructions and are necessary for the bank’s internal compliance policies. The completeness of documentation directly affects the speed and efficiency with which the closure is processed.
            

8. Role of the Board Resolution in Account Closure

A Board Resolution acts as the company’s official internal authorization to close the bank account. It specifies the name of the bank, the account number, and the details of the authorized signatory empowered to submit the closure request.
Banks rely heavily on Board Resolutions to confirm that the instructions originate from the competent authority. The resolution also declares that all liabilities related to the account have been settled and authorizes the transfer of remaining balances. Without a properly drafted and signed resolution, banks may refuse to close the account.
            

9. Responsibilities of Authorized Signatories

Authorized signatories play a critical role in the account closure process. They must ensure the company has no pending cheques, unprocessed transactions, or ongoing commitments linked to the account. They must also confirm that all customers, vendors, and internal teams have been notified about the change to prevent accidental payments or deposits.
Signatories are responsible for signing the letter, verifying attached documents, coordinating with the bank, and collecting closure confirmation. Their signature on the letter legally binds the company and affirms that all instructions are accurate.
            

10. Procedural Steps Followed by Banks

Upon receiving a request letter, banks follow specific procedures. They verify the authenticity of the letter and supporting documents, check for pending standing instructions, ECS mandates, or cheque clearances, and ensure that the account is free from charges or liabilities.
Banks then process the transfer of funds to the designated account, close the existing account, update internal systems, and issue a formal closure confirmation letter or email. This entire process ensures transparency, accuracy, and compliance with banking regulations.
            

11. Risks of Improper Account Closure

Improper or incomplete closure of a company bank account can result in several risks. Outstanding cheques may bounce, leading to legal liabilities. Vendors or customers may continue making payments to the old account, causing operational disruptions. The bank may continue charging fees, and funds may remain locked or inaccessible.
A formal, well-documented closure request helps prevent these complications. It seals the account legally, ensures fund transfer, and eliminates unauthorized access.
            

12. Importance of Maintaining Closure Records

After the account is formally closed, the company must maintain copies of the closure letter, acknowledgment from the bank, and all supporting documents. These records are essential for audits, financial statements, internal reviews, and regulatory compliance. They also serve as proof for lenders, investigators, or future auditors that the closure was lawful and proper.
            

13. Conclusion

The request letter for closing a company bank account and transferring funds is more than a simple administrative communication—it is a formal, legally binding document that protects both the bank and the company.
A properly drafted letter ensures clarity, authorizes the bank to act, safeguards against misuse, and maintains compliance with legal and corporate governance standards. By understanding the significance of each element—such as fund transfer instructions, board resolution requirements, and procedural protocols—companies can ensure a seamless and transparent account closure process.
Incorporating precision, professionalism, and proper documentation makes this request letter an essential part of responsible financial management.
            

Date: ____________

To
The Branch Manager
_________________________ Bank
_________________________ Branch
City: ________________
PIN: __________________

Subject: Request for Closure of Company Bank Account and Transfer of Remaining Funds

Dear Sir/Madam,

We, ________________________ Private Limited, request the closure of our company’s current/savings bank account maintained with your branch. The details of the account are provided below. As part of our internal restructuring/operational requirements, the Company has decided to discontinue the use of this account and close it permanently.

The details of the account to be closed are as follows:

Account Name: ________________________

Account Number: ________________________

Type of Account: Current / Savings

Customer ID (if applicable): __________________

Registered Mobile Number: _________________

We kindly request you to close the above-mentioned bank account and arrange to transfer the remaining balance to the following account:

Beneficiary Name: ________________________

Bank Name: ______________________________

Branch: __________________________________

Account Number: __________________________

IFSC Code: _______________________________

We confirm that all pending transactions, cheques, and obligations related to this account have been cleared/settled. We undertake that the Company will not issue or present any further cheques or instruments from this account.

We also request you to deactivate any services linked to this account, including:

Net banking / mobile banking

Debit card facilities

Auto-debits, ECS mandates, standing instructions

Corporate banking access

Overdraft or credit facilities (if any)

Kindly acknowledge receipt of this request and process the closure at the earliest. We have enclosed the following documents for verification and processing:

Board Resolution for Bank Account Closure

KYC Documents of Authorized Signatories

Company PAN & Certificate of Incorporation

Cancelled Cheque of Transfer Account

Any other documents required by the bank

We would appreciate your prompt action in this matter. Should you require any further information or clarification, please feel free to contact us at __________________.

Thank you for your cooperation.

Warm regards,
For ________________________ Private Limited

________________________
Name of Authorized Signatory
Designation: __________________
Phone: ________________________
Email: ________________________