The Reserve Bank of India (RBI) has introduced updated guidelines for banks regarding the opening and operation of accounts by minors—defined as individuals under the age of 18. These new rules are designed to offer more flexibility to both banks and customers, while ensuring appropriate parental oversight. Banks have been instructed to align their policies with the revised framework by July 1, 2025. Until then, existing practices may continue.
As per the new circular issued to commercial and cooperative banks, minors can now open and operate savings and term deposit accounts with the help of a parent or legal guardian. Importantly, children aged 10 years and above may be allowed to manage their accounts independently, depending on the bank’s internal risk management policies. Banks are free to set their own terms and limits for such accounts, but these conditions must be clearly communicated to the young account holders.
Once the account holder turns 18, banks are required to update operational instructions and collect a new specimen signature for future reference. If the account was previously managed by a guardian, the bank must also verify the existing balance during the transition.
However, the RBI has clarified that these new provisions are not mandatory. Banks have the discretion to adopt these norms based on their risk assessments and suitability criteria. They may also choose to provide additional banking services—such as internet banking, ATM or debit cards, and cheque book facilities—to minor account holders. That said, banks must ensure that these accounts do not go into overdraft and always remain in credit.
For parents, this means that children of any age can have a bank account in their name, operated by a parent or legal guardian—including the mother. From the age of 10, children may be granted the independence to manage their own accounts, with suitable safeguards in place. These changes aim to strike a balance between encouraging financial literacy among children and maintaining responsible supervision by adults.
