HT Digital
GUWAHATI, APR 22: The Reserve Bank of India (RBI) announced on Monday that banks are now permitted to allow minors aged 10 years and above to independently open and manage both savings and term deposit accounts.
According to an RBI circular, banks may also offer internet banking, ATM/debit cards, and cheque book facilities to minor account holders based on their internal risk management policies, product suitability, and customer appropriateness.
Previously, minors were only allowed to open savings accounts, and there were no clear guidelines on offering internet banking, ATM/debit cards, or cheque book facilities to them. With this new directive, minors have expanded banking privileges, aligning with modern banking practices.
The RBI clarified that minors of any age could still open and operate savings and term deposit accounts through a natural or legal guardian, including the mother acting as a guardian.
For minors aged 10 and above who wish to manage their accounts independently, banks must lay down specific terms and conditions, which should be clearly communicated to the account holder. Once a minor reaches the age of majority, banks are required to obtain fresh operating instructions and updated specimen signatures.
Additionally, in cases where accounts are operated by guardians, banks must ensure balance confirmation and take proactive steps to facilitate a smooth transition as minors attain majority. The RBI also emphasized that minor accounts, whether operated independently or by a guardian, must not be overdrawn and should always maintain a credit balance.
