RBI Allows Minors Aged 10 And Above To Independently Operate Bank Accounts

In a move aimed at enhancing financial inclusion among the youth, the Reserve Bank of India (RBI) has introduced new provisions allowing minors aged 10 years and above to open and operate savings and term deposit accounts independently, subject to specific conditions laid down by individual banks.

The central bank, through a circular issued to commercial and cooperative banks, updated its instructions regarding deposit accounts held by minors. According to the revised rules, "minors of any age may be allowed to open and operate savings and term deposit accounts through his/ her natural or legal guardian", the  RBI said. Additionally, banks can permit the mother to act as a guardian when opening such accounts, reported PTI.

Bank Discretion and Risk Policy Will Guide Account Terms

The RBI has given banks the discretion to set age-based and amount-based conditions for minors who wish to manage their accounts independently. These conditions must align with each bank’s risk management framework and be clearly communicated to the young account holders. "Minors above such an age limit not less than 10 years and up to such amount and such terms as may be fixed by the banks keeping in view their risk management policy, may be allowed to open and operate savings/ term deposit accounts independently, if they so desire, and such terms shall be duly conveyed to the account holder," the RBI stated.

Furthermore, once the account holder reaches the age of majority, banks are required to collect new operating instructions and signature specimens for record-keeping purposes.

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Additional Services, Due Diligence, and Policy Overhaul

Banks have also been permitted to extend various banking services to minor account holders at their discretion. "The banks are free to offer additional banking facilities like internet banking, ATM/ debit cards, cheque book facility, etc, to the minor account holders basis their risk management policy, product suitability and customer appropriateness," the banking regulator said in its circular.

However, the RBI  emphasised the importance of maintaining account integrity. Accounts, whether independently managed or overseen by a guardian, must not be overdrawn and must always maintain a credit balance. The central bank also highlighted the need for customer due diligence both at the time of account opening and on an ongoing basis.

To ensure compliance, banks have been instructed to either update their existing policies or formulate new ones in line with the revised framework by July 1, 2025.

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