RBI’s revised guidelines allow minors to open bank account, avail net banking, but with these conditions, check for more details

The Reserve Bank of India has introduced new guidelines according to which minors will now be able to open their bank account including many other facilities like term deposit accounts, atm cards and more. The apex bank has allowed banks to freely offer more facilities like issuing cheque book, debit cards, etc. to the minor account holders. However, the banks are required to subject them to risk management policy, product suitability and customer appropriateness, read a new circular by the RBI.   

Reserve Bank of India has issued guidelines in the past to banks on opening of and operations in the deposit accounts of minors. The existing guidelines have been reviewed with an aim to rationalise and harmonise the extant guidelines. 

According to the new guidelines, minors can open and operate savings and term deposit accounts with their parents or legal guardian. In such cases, mothers can also become guardians. However, only minors above the age of 10 years are allowed to open and operate savings/ term deposit accounts independently, and these terms must be conveyed to the account holder. 

When these minors turn 18, adults, their signature must be recorded and kept on record but of the account is operated by the guardian, the balance shall be confirmed. The banks shall take advance action, including communicating these requirements to minor account holders attaining the age of majority, to ensure fulfilment of these requirements. 

The RBI also gave the banks a free hand to offer additional banking facilities like internet banking, ATM/ debit cards, cheque book facility, etc., to the minor account holders. The banks shall ensure that accounts of minors, whether operated independently or through a guardian, are not allowed to be overdrawn and that these always remain in credit balance. 

The banks shall perform customer due diligence for opening of deposit accounts of minors and undertake ongoing due diligence, as per the provisions of Master Direction on Know Your Customer (KYC) Direction, 2016 dated February 25, 2016, as amended from time to time. The above guidelines are issued under sections 35A and 56 of the Banking Regulation Act, 1949. Banks are advised to make new and/ or amend existing policies to align them with these guidelines, latest by July 01, 2025. In the meanwhile, existing policies may continue.