The Reserve Bank of India (RBI) now allows children aged 10 and up to open and operate savings and term deposit accounts independently.
This new directive, released on Monday, April 21, aims to promote greater financial inclusion among young people from an early age.
Banks must adopt these standards by July 1, 2025, and ensure that accounts are appropriately checked and monitored, reports NDTV.
Minors above the age of ten can now handle their accounts without the need for a guardian, as long as the account terms comply with the bank's risk management regulations.
Minors will continue to be able to open accounts through their legal or natural guardians, including their mothers. When minors achieve the age of majority, banks must update the operational instructions and specimen signatures in their account records.
Banks can also provide extra services such as internet banking, debit cards, or cheque books based on the customer's needs and their risk policies. Whether the account is administered freely or by a guardian, it must always be in positive balance.
Prior to the latest change, the RBI allowed minors to create savings accounts, but only through a guardian, such as a parent or legal guardian.
The guardian would manage the account on the minor's behalf. Minors could not operate their accounts independently until they reached the age of majority, which was normally 18 years.
Minors' accounts were often subject to the terms imposed by their guardians, and other banking services, such as debit cards or internet banking, were typically unavailable to minors.
