New RBI Regulations Permit Kids Over 10 Years To Operate Their Bank Account

In a policy shift at short notice, the Reserve Bank of India (RBI) has amended its instructions on banking to allow minors aged over 10 years to open bank accounts independently without any assistance from their parents or guardians. The move is part of an overall agenda of raising banking and financial literacy among youth. Banks will implement the facilities from July 1.

Earlier, even though children were permitted to open accounts, they had to be supervised by a guardian, in all probability a parent, for every transaction. The new directives now permit responsible minors to operate saving and term deposit accounts independently, such as internet banking, debit cards, and cheque books.

How the Guidelines Have Changed

Reserve Bank of India as a directive directed all the scheduled banks to modify their practice for the minor account holders. The children who are 10 years and older can now:

Open and maintain savings and term deposit accounts in their own name
Utilize ATM/debit card, internet banking, and cheque book facilities without the signature of the guardian
Give their specimen signature and identification personally to the bank

These provisions are a departure from the conventional requirement that the account of the child ought to be controlled and managed by the guardian, typically the parent of the child.

Why the Change Is Important

This regulatory change is geared towards instilling good banking habits at an early age. It is meant to:

Encourage financial education and autonomy at an early age
Make it easier for children to bank as young earners, for example, child actors, athletes, or social mediapreneurs
Reduce the need for parental intervention in routine transactions

With digital transactions becoming increasingly common, RBI’s move positions minors to become more financially competent and tech-savvy.

What Banks Must Do Starting July 1

All banks must comply with the updated instructions by July 1. This includes:

Updating operating manuals and in-house systems to include the eligibility of minors
Re-verification of account information of existing account holders over 10 years of age
Approvals of new account applications by qualifying minors without a co-signing sponsor