RBI Empowers Minors Aged 10+ to Independently Operate Bank Accounts
In a major step towards promoting early financial literacy, the Reserve Bank of India (RBI) has allowed minors aged 10 years and above to independently open and operate their own savings and term deposit accounts. This progressive move aims to instill financial discipline and awareness among children at a younger age.
Independent Access for Minors
Until now, bank accounts for minors required the involvement of a natural or legal guardian. With the new directive, minors above the age of 10 can now independently manage their accounts, although banks retain discretion to evaluate eligibility based on their internal risk policies. These institutions are expected to clearly define and communicate the operating terms to young account holders.
Transition Upon Attaining Majority
Once the minor turns 18, banks are required to obtain fresh operational mandates, including new signatures. In cases where accounts were formerly overseen by a guardian, the transition must include proper balance confirmation and handover procedures to the now-adult account holder.
Facilities, Restrictions, and KYC Norms
Banks may also extend additional facilities such as debit cards, cheque books, and online banking access, provided they align with institutional policies and consider the appropriateness of these services for minors. However, all such accounts must strictly maintain a positive balance; overdraft facilities are not permitted under any circumstance.
As per the Master Direction on Know Your Customer (KYC), banks must perform customer due diligence at the time of account opening for minors and continue to monitor account activity. All banking institutions are required to revise their internal policies and align them with these RBI norms by July 1, 2025.
This move is seen as a push towards greater financial inclusion for India’s youth, equipping them with practical banking experience and encouraging responsible financial habits from a young age.
