Minors aged 10+ can open, operate bank accounts independently

New Delhi, Apr 22, 2025

Regulator says banks may offer facilities such as internet banking, ATM/debit cards, cheque books to minors

The Reserve Bank of India (RBI) has issued new guidelines for opening and operating bank accounts for minors, aiming to make banking accessible to young people and ensuring a smooth transition when they become adults.

Minors can open accounts
According to the circular released on April 21, minors of any age can now open savings or term deposit accounts through their “natural or legal guardians”. In line with a long-standing directive, banks have to accept mothers as guardians for such accounts, reinforcing an earlier circular from 1976.

The RBI has allowed minors aged 10 and older to independently operate their own savings or term deposit accounts. This is subject to limits set by individual banks, which can decide based on their own risk management policies. The terms and conditions for such accounts must be clearly communicated to the young account holders.

Once a minor turns 18, banks are required to obtain fresh operating instructions and signature samples from the account holder. If the account was being operated by a guardian, the final balance must be confirmed. The RBI has asked banks to prepare in advance and inform minors approaching adulthood about these changes.

The RBI has said that banks may offer facilities such as internet banking, ATM/debit cards, and cheque books to minors, again based on a lender’s risk and product suitability assessments.

However, the central bank has instructed banks that accounts held by minors must always remain in credit and should not be overdrawn, regardless of whether the account is operated by the minor or a guardian.

Deadline for banks
The RBI emphasised that banks must carry out proper customer identification and maintain ongoing due diligence for these accounts, in line with the Know Your Customer norms.

These new rules come under the powers vested in RBI by sections 35A and 56 of the Banking Regulation Act, 1949. Banks have been given time until July 1, 2025, to revise their existing policies accordingly.

Keypoints:

Minors of any age can open savings or term deposit accounts through their natural or legal guardian.

Mothers must be accepted as guardians, in line with RBI’s 1976 directive.

Minors aged 10 and above can operate accounts independently, subject to individual bank policies.

On attaining 18 years, fresh signatures and instructions must be collected from the account holder.

Banks may offer internet banking, ATM/debit cards, and cheque books to minors based on suitability.

Minor accounts must always remain in credit; overdrafts are not allowed.

Banks must comply with KYC norms and ongoing due diligence.

Deadline to implement new policies: July 1, 2025.

Issued under Sections 35A and 56 of the Banking Regulation Act, 1949.

[The Business Standard]