The Reserve Bank of India (RBI) has revised its guidelines to allow children above the age of 10 to independently open and operate savings and term deposit accounts in banks. The new rules apply to both commercial and cooperative banks and are part of a broader push to inculcate financial literacy and digital responsibility at a younger age.
Previously, minors were only permitted to hold bank accounts through natural or legal guardians. Under the revised guidelines, banks may now evaluate and allow minors aged 10 and above to operate accounts autonomously, depending on internal risk management policies and suitability criteria.
This policy shift aligns with India’s larger vision of inclusive banking, where empowering the next generation with money management tools becomes essential in the digital age.
Conditions and Safeguards: Balancing Freedom with Security
According to the RBI’s circular, banks must ensure that the minors’ accounts remain in credit and cannot be overdrawn. Additionally, banks are free to offer supplementary services such as internet banking, debit cards, cheque book facilities, and mobile banking—but only after assessing the suitability and maturity of the account holder.
Importantly, customer due diligence remains mandatory. Banks must conduct KYC (Know Your Customer) verification and perform ongoing due diligence in line with the Master Direction on KYC, 2016. They must also obtain fresh operating instructions and updated signatures once the account holder attains the age of majority (18 years), ensuring continuity and compliance.
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In scenarios where guardians currently operate the account, banks must verify balances and reconfirm account status as the child transitions into adulthood.
Financial Literacy and Industry Implications
Industry observers have welcomed the move, calling it a progressive step toward nurturing financially savvy citizens. The decision is also expected to open up new products tailored to young users, including savings schemes, financial education apps, and youth-targeted fintech solutions.
Educators and child welfare advocates have also lauded the decision. “This empowers children with real-world skills and instills a sense of responsibility. But it must be accompanied by adequate awareness and education,” said Richa Sharma, a Delhi-based financial literacy advocate.
Banks, meanwhile, are expected to respond with updated internal policies, additional digital safeguards, and specially designed interfaces for minor-operated accounts.