Children Aged 10 And Above Can Now Operate Bank Accounts Independently In India: RBI
New Delhi: In a push towards financial inclusion, the Reserve Bank of India (RBI) has updated its regulations to allow minors aged 10 years and above to independently open and operate bank accounts. These changes, announced through a circular issued on Monday, apply to all commercial banks as well as cooperative banks, including primary (urban) cooperative banks, state cooperative banks, and district central cooperative banks.
Under the revised guidelines, children can now have savings or term deposit accounts in their own name. While minors of any age are still permitted to open such accounts through a natural or legal guardian, those who are at least 10 years old now have the option to manage these accounts independently.
Banks are now responsible for establishing specific terms for these accounts according to their own risk management policies. This includes setting caps on deposits, tailoring services, and defining operating conditions. Additionally, the RBI’s new directions give banks the discretion to provide services like internet banking, debit or ATM cards, and cheque books to minor account holders. However, such services can only be extended after the bank assesses product suitability and adjusts its risk protocols accordingly.
To prevent financial risks, the RBI has emphasized that all minor accounts, whether managed independently or through guardians, must not be allowed to fall into overdraft. The accounts must always maintain a positive balance, and no loans or negative balances are to be permitted.
Compliance with Know Your Customer (KYC) norms remains mandatory. When a minor account holder reaches adulthood at 18, banks are required to initiate fresh documentation. This includes updating operational instructions, collecting a new specimen signature, and, if the account was managed by a guardian, confirming the balance at the time of transition. All banks have until July 1, 2025, to revise or establish internal policies that align with the RBI’s new framework.