Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Industry / RBI allows minors above 10 years to open, operate bank accounts
BackBack

RBI allows minors above 10 years to open, operate bank accounts

RBI says banks are now free to set their own limits on amounts upto which minors can be allowed to operate in their accounts

So far, only individuals above the legal voting age of 18 years were allowed to operate their accounts. Photo: Pradeep Gaur/MintPremium
So far, only individuals above the legal voting age of 18 years were allowed to operate their accounts. Photo: Pradeep Gaur/Mint

Mumbai: The Reserve Bank of India (RBI) has allowed children above 10 years “to open and operate savings bank accounts independently if they so desire."

In a notification on Tuesday, RBI also said banks are now free to set their own limits on amounts upto which minors can be allowed to operate in their accounts.

So far, only individuals above the legal voting age of 18 years were allowed to operate their accounts.

The latest change has been done “with a view to promote the objective of financial inclusion and also to bring uniformity among banks in opening and operating minors’ accounts," RBI said.

“Banks can also decide, in their own discretion, as to what minimum documents are required for opening of accounts by minors," RBI said.

“Banks are free to offer additional banking facilities like internet banking, ATM/debit card, cheque book facility etc., subject to the safeguards that minor accounts are not allowed to be overdrawn and that these always remain in credit," RBI said.

The RBI move would encourage children to start saving early, said one banker.

“It’s quite a revolutionary idea because the RBI is putting its faith and trust in the young encouraging them to start savings early. So far we had products for teenagers but even they could not sign on their own so it was linked to their guardians. We will have to develop products for children below 13 but we will also have to check the legality of the same because minors still cannot sign cheques. May be gaurdians can allow withdrawals only upto a certain limit but all that will have to be worked out and this will evolve over time," said Shyam Srinivasan, managing director and chief executive officer at Federal Bank Ltd.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 06 May 2014, 07:58 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App