The short answer
It depends on how your business is set up. Payment gateways decide where your money can land. Razorpay's activation guide says a business registered with the government should give a current account registered to the business. A sole proprietor or an unregistered seller may give personal bank details instead. So a registered partnership, LLP or company needs a current account from day one. A sole proprietor can start with a savings account and switch later.
Why a separate account helps anyway
Even when it is optional, one account for the business makes life easier. Every UPI payment, card settlement and COD remittance lands in one place. Your CA can read the statement without sorting out family transfers and personal bills. When you file GST returns, the sales in your store and the credits in your bank line up. A clean statement also helps when a supplier or lender asks to see one. And if you later form an LLP or company, your trading history already sits in one place.
What the bank asks a sole proprietor for
The RBI's Know Your Customer rules set the list. For a sole proprietary firm, the bank first verifies you as an individual. It then collects any two documents that prove the business exists in the firm's name. If you cannot give two, the bank may accept one. It must then check that the business really runs from your address. These are the main proofs the RBI lists.
Proofs of business the RBI accepts
| Proof | What it is | Fits an online seller when |
|---|---|---|
| Udyam Registration Certificate | The MSME registration from the Udyam portal | Almost always - it is free and needs no uploads |
| GST certificate | Your GST registration | You are registered for GST |
| Shop and Establishment certificate | A licence under your state's shops law | Your state covers your premises |
| Income tax return | Your complete return showing the firm's income | You have filed a return with business income |
| Utility bill | An electricity, water or landline bill | The bill is in the business name |
What Razorpay checks
Razorpay runs its own checks before it switches on live payments. For a proprietorship, it asks you to upload two documents from a short list. The list is an Udyam certificate, a GST certificate, a Shop and Establishment certificate, an import export code or a postpaid mobile bill. You also give your PAN, address proof and bank details. If Razorpay cannot verify the bank account, it asks for a video of a cancelled cheque. Keep the name on your bank account and your documents the same, so the checks match.
Choosing a bank and switching over
Compare a few banks before you open the account. Look at the minimum balance and the charges on transactions and cash deposits. Ask whether the account suits UPI collections and the net banking you use. Once it is open, update the settlement account in your gateway and on every marketplace, so no payout goes to the old account. On a paid plan, you can connect your own Razorpay account to The Storemate, so online payments settle to the bank account you verified with Razorpay. If you are unsure which structure suits you, check with a CA.