RBI allows minors above 10 years to operate savings bank accounts independently

The Reserve Bank of India on Monday permitted banks to let minors above the age of 10 open and operate savings and term deposit accounts independently, reported news agency PTI.

The RBI issued revised directives on opening deposit accounts and operating them in the case of a minor, in a circular addressed to commercial and cooperative banks.

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"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," it said.

Further, the RBI stated that after one becomes an adult, fresh operating instructions should be provided, and a separate specimen signature of the account holder should be obtained and kept on record.

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The RBI added in the circular, "The banks are free to offer additional banking facilities like internet banking, ATM/ debit cards, cheque book facility, etc, to the minor account holders based on their risk management policy, product suitability and customer appropriateness."

RBI directives for all minors

The RBI, in its revised directives on opening the deposit account and operation of the accounts of minors, stated that minors of any age can open and operate savings and term deposit accounts through their natural or legal guardian.

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It is especially noted that such accounts can also be opened with the mother as the guardian.

As per the RBI guidelines, banks will be required to ensure that accounts of minors, whether operated independently or through a guardian, are not allowed to be overdrawn and that they always remain in a credit balance.

Additionally, banks will also perform customer due diligence for opening of deposit accounts of minors and undertake ongoing due diligence.

Banks will have to make new policies or amend their existing policies aligned with the new directives, latest by July 1, 2025.