RBI Allows Children Aged 10 and Above to Open and Operate Bank Accounts

In a major move, the Reserve Bank of India (RBI) has announced that children aged 10 years and above can now independently open and operate their own savings and term deposit accounts. This decision, made public on April 21, 2025, aims to teach financial responsibility from an early age. 

RBI: Minors Can Now Operate Accounts 

According to RBI’s new rules, minors can now open and manage their own bank accounts, as long as the bank agrees and sets proper limits under its risk policy. This means children can get familiar with saving and banking on their own, which can help build strong money habits. 

Accounts Still Allowed With Guardians 

The RBI has also confirmed that banks can continue to open accounts for minors of any age through a parent or guardian. It specifically noted that mothers can be guardians, following a 1976 circular. This ensures flexibility for younger children and families. 

RBI’s Rules When Child Turns 18 

When a minor turns 18, banks must get new signatures and instructions from them. If a guardian was managing the account earlier, the bank must confirm the account balance and help with the shift to adult control. 

Modern Banking Access by RBI

With permission from banks, minors can also be given access to ATM/debit cards, internet banking, and cheque books. However, all these services must follow the bank’s risk and safety guidelines. 

No Loans or Overdrafts 

Minor accounts must always remain in credit. Banks are not allowed to let these accounts go into overdraft, whether operated by the child or a guardian. 

KYC Is a Must: RBI

Banks must follow full KYC (Know Your Customer) rules when opening minor accounts. These checks will ensure that all minor accounts meet RBI’s rules for safety and identity. 

Conclusion 

This move by RBI is a positive step towards financial literacy and inclusion for young Indians. It encourages children to learn banking skills early and be more responsible with money.

Read more on: RBI Named Most Innovative Financial Institution By Global Finance

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