RBI Empowers Minors with Independent Banking

The Reserve Bank of India has revised its guidelines to allow minors above ten years to independently open and operate savings or term deposit accounts. These amendments prescribe banks to adhere to policies that suit their risk management, ensuring accounts remain in credit and conducting regular due diligence.

The Reserve Bank of India (RBI) has announced significant changes to its banking regulations, allowing minors over the age of ten to open and operate their own savings and term deposit accounts. This move is aimed at promoting financial independence among young individuals.

According to a circular issued to both commercial and cooperative banks, minors can open accounts with the help of their natural or legal guardians. However, for those aged above ten, independent operation of accounts is now permitted within limits set by individual banks, keeping in mind their risk management policies.

Banks have been issued guidelines to ensure these minor-operated accounts do not become overdrawn and always maintain a credit balance. They are also encouraged to offer additional services such as internet banking and ATM cards, tailored to the suitability for minors. These regulatory updates must be incorporated into existing bank policies by July 1, 2025.

(With inputs from agencies.)