The Reserve Bank of India (RBI) has taken a major step towards encouraging early financial independence by permitting children of ten years of age and older to open and manage their own savings and term deposit accounts.
Banks can now allow juveniles to handle their own accounts, according to the limits set by each bank's risk policy, according to updated guidelines released on April 21, 2025. This represents a significant change in the way the banking sector interacts with young consumers.
The revised guidelines' salient features include:
1. Through a natural or legal guardian, banks may permit minors of any age to open and manage savings and term deposit accounts. In accordance with its long-standing 1976 circular, the RBI went over the clause permitting mothers to serve as guardians for such accounts.
2. Under the restrictions and conditions set by each bank's internal risk management policy, minors above the age of ten may open and manage their accounts on their own. The account holder must be made fully aware of these terms.
3. Banks are required to obtain new signatures and operating instructions from account holders upon reaching the age of 18. The balance needs to be verified if a guardian was in charge of the account.
4. When opening small accounts, banks are required to conduct due diligence on customers and maintain compliance with the RBI's Master Direction on KYC, 2016.
5. Minor accounts must be kept in credit and cannot be overdrawn, whether they are managed by a guardian or on their own.
All commercial banks, state cooperative banks, district central cooperative banks, and urban cooperative banks will be subject to these rules. By July 1, 2025, institutions must update their policies to reflect the changes.
.png?w=50&fm=png){kind=spacer}