What changed
RBI has replaced multiple legacy circulars (dating back to 1976-2014) with one consolidated directive on minor deposit accounts. The new guidelines allow minors of any age to open savings/term deposit accounts through a natural or legal guardian, and minors above a minimum age (not less than 10 years) can operate accounts independently within limits set by the bank. Banks are now explicitly permitted to offer additional banking facilities like internet banking, ATM/debit cards, and cheque books to minor account holders, subject to their risk management policy.
What it means for you
Banks need to update their internal policies and product offerings for minor accounts by July 1, 2025, to comply with the unified framework. The flexibility to set age thresholds (minimum 10 years) and transaction limits for independent operation allows banks to tailor products based on risk appetite. Offering digital facilities to minors could expand customer base and early financial inclusion, but banks must ensure accounts never go overdrawn and KYC norms are strictly followed. The repeal of older circulars simplifies compliance but requires careful transition management.
What you must do
- Review and revise your bank's policy on minor deposit accounts to align with the new consolidated guidelines by July 1, 2025.
- Define clear age thresholds (minimum 10 years) and transaction limits for minors operating accounts independently, based on your risk management policy.
- Update account opening forms, KYC processes, and system workflows to accommodate minors of any age with guardians and independent operation for older minors.
- Communicate proactively to existing minor account holders approaching majority about fresh operating instructions and signature requirements.
- Ensure that overdraft facilities are disabled for all minor accounts and that ongoing due diligence is performed as per KYC Master Direction 2016.
Who it affects
All Commercial Banks, All Primary (Urban) Co-operative Banks, All State Co-operative Banks and District Central Co-operative Banks, Minor account holders and their guardians, Bank compliance and product teams
Can a minor below 10 years open a bank account independently?
No. Minors of any age can open accounts only through a natural or legal guardian. Independent operation is allowed only for minors above an age threshold set by the bank, which must be at least 10 years.
What happens when a minor operating an account independently turns 18?
Upon attaining majority, the bank must obtain fresh operating instructions and specimen signature from the account holder. If the account was operated by a guardian, the balance must be confirmed. Banks should take advance action to communicate these requirements.
Are banks allowed to issue debit cards to minor account holders?
Yes, banks may offer additional facilities like internet banking, ATM/debit cards, and cheque books to minor account holders, based on their risk management policy, product suitability, and customer appropriateness.