The Reserve Bank of India (RBI) has now allowed minors aged 10 years or above to open and operate their bank accounts independently. Earlier, the bank accounts of minors were operated by parents or legal guardians.
On Monday, the central bank made this big announcement and issued a circular saying that ‘minor age limit of 10 years or above may be allowed to open and operate savings/term deposit accounts independently.
From ATM to cheque book for minors!
According to PTI, RBI has said that such minors can be allowed to open and operate accounts through their family members or legal guardians. The central bank also said that various banks can provide additional banking facilities to minors’ accounts based on their risk management policy. According to the circular, banks are free to provide necessary facilities including internet banking, ATM/debit card, cheque book to minor account holders.
This is the objective of RBI behind the rule change.
According to the circular issued by the central bank in this regard, now a minor of any age can open a savings or fixed deposit account in his/her name. Minors below the age of 10 years will also be allowed to open such bank accounts by making their mothers the guardian. At the same time, children of 10 years and above can be allowed to operate their accounts independently, although the concerned banks can set limits and conditions according to their policies. These should also be clearly explained to the minor account holders.
Apart from this, when the minor turns 18, the bank will ask for new operating guidelines and sample signature. In such a situation, if the account is being managed by the guardian, the bank will verify the balance. According to RBI, the purpose of these changes (RBI Rule Change) is to promote financial literacy among children under the guidance of parents.
New rules will come into effect from July 1!
Regarding the amendments made by the Reserve Bank of India (RBI) in its guidelines for opening and operating bank accounts for minors and children below the age of 18 years, banks have been advised to make their existing policies in line with the revised norms by July 1, 2025. That is, the existing rules may continue till then.
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