RBI Empowers Minors Above 10 to Independently Operate Bank Accounts in India

The Reserve Bank of India (RBI) has introduced revised guidelines allowing minors aged 10 years and above to independently open and operate savings and term deposit bank accounts, effective from April 21, 2025. This move aims to promote financial inclusion and literacy among young individuals across India.

According to the RBI circular issued to all commercial and cooperative banks, minors above 10 can manage their accounts without a guardian, subject to terms set by banks based on their risk management policies. Banks have the flexibility to determine transaction limits and conditions, ensuring these are clearly communicated to the account holders. Minors of any age can also open accounts through their natural or legal guardians, including their mother, as per the updated norms.

The RBI has emphasized that minor accounts, whether operated independently or through a guardian, must always maintain a credit balance and cannot be overdrawn. Banks are required to conduct thorough Know Your Customer (KYC) checks during account opening and ongoing due diligence, in line with the Master Direction on KYC, 2016. Upon reaching the age of majority (18), banks must collect fresh operating instructions and a specimen signature from the account holder. If the account was managed by a guardian, the balance must be confirmed.

Banks may offer additional facilities like internet banking, ATM/debit cards, and cheque books to minor account holders, depending on their internal policies, product suitability, and customer appropriateness. All banks are directed to align their policies with these revised guidelines by July 1, 2025, with existing practices continuing until then.
This initiative is seen as a significant step toward fostering financial independence and awareness among young Indians, enabling them to learn money management early while maintaining strict safety measures.