The Reserve Bank of India (RBI) on Monday allowed banks to allow minor children above the age of 10 years to open and operate savings/term deposit accounts independently. The central bank has issued revised instructions on opening and operating deposit accounts of minors in this regard.

RBI said in a circular issued to commercial banks and cooperative banks that minors of any age can be allowed to open and operate savings and term deposit accounts through their natural or legal guardian. They can also be allowed to open such accounts by keeping their mother as guardian.

The circular said, "Minors of at least ten years of age and above can be allowed to open and operate savings/term deposit accounts independently at their will. In this, banks can decide the amount and conditions keeping in mind their risk management policy. Whatever terms and conditions are decided in this regard, the account holder will be informed about it.

Further, on attaining adulthood, new operating instructions and specimen signatures of the account holder should be obtained and kept on record. The circular said, "Banks are free to provide additional facilities like internet banking, ATM/debit card, checkbook facility, etc. to minor account holders based on their risk management policy, product and customers. "

Banks have to ensure that the accounts of minors, whether operated independently or through a guardian, are not overdrawn and that there is always money in it. RBI said that apart from this, banks will do proper investigation of the customer to open deposit accounts of minors and will continue to do so. The central bank has asked the banks to make new policies or amend the existing policies in line with the revised guidelines by July 1, 2025.

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