The Reserve Bank of India (RBI) has taken a major step toward encouraging early financial independence by permitting children ten years of age and older to open and manage their own savings and term deposit accounts on their own. A significant change in the way the banking sector interacts with young consumers has occurred with the release of the updated rules on April 21, 2025, which allow banks to allow minors to handle their own accounts—within the parameters set by each bank's risk policy.
Key highlights of the new guidelines:
Minor accounts at any age: Banks may allow minors of any age to open and operate savings and term deposit accounts through a natural or legal guardian. The RBI has reaffirmed the provision to allow mothers to act as guardians for such accounts, as per its long-standing circular from 1976.
Independent operation from age 10:
Minors above the age of 10 may open and operate their accounts independently, subject to limits and terms defined by individual banks, based on their internal risk management policies. These terms must be clearly communicated to the account holder.
Transition upon majority: On attaining majority (18 years), banks must collect fresh signatures and operating instructions from the account holder. If the account was managed by a guardian, the balance must be confirmed. Banks are instructed to take proactive steps to ensure a smooth transition.
Access to modern banking tools: Subject to their risk policies, banks are allowed to offer additional facilities like internet banking, ATM/debit cards, and cheque books to minor account holders.
No overdrafts allowed: Whether operated independently or through a guardian, minor accounts must remain in credit and cannot be overdrawn.
KYC compliance mandatory: Banks must perform customer due diligence while opening minor accounts and continue compliance under the RBI’s Master Direction on KYC, 2016.
These guidelines will be applicable to all commercial banks, urban co-operative banks, state co-operative banks, and district central co-operative banks. Institutions are required to revise their policies accordingly by July 1, 2025, RBI said.
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