10-year-olds can open and operate a bank account alone, says Reserve Bank of India

Friday, May 9, 2014

MUMBAI: Children older than 10 years will no longer need the help of their parents or guardians to open and operate a savings bank account. To boost financial inclusion, the Reserve Bank of India (RBI) on Tuesday said that banks were at liberty to allow minors above 10 years to independently open and operate savings bank accounts. As of now, banks allow minors to operate bank accounts only along with a parent or a guardian. All children and teenagers below the age of 18 are considered minors under current rules.

RBI also allowed banks to offer additional facilities like internet banking, ATM, debit card and chequebook to a minor. However, the central bank said that such facilities should be within the overall norms that banks will not allow a minor’s account to be overdrawn and that these accounts should always remain in credit.

However, RBI has given the leeway to banks to fix the minimum age at which they will allow minors to operate savings bank accounts independently. Banks can also fix a maximum limit on money such minors can have at their disposal through such account. Banks can also decide on what kind of documents will be needed to open accounts by minors, a notification from RBI said.

In a separate notification, the RBI said banks cannot slap charges on customers for not maintaining the minimum balance in inoperative savings and current accounts — in which no transactions have been made for two years. The central bank had announced this change in its April 1 monetary police and was made effective on Tuesday.

Source: The Times of India (link opens in a new window)

Base of the Pyramid, financial inclusion