Mumbai: With an aim to strengthen long-term financial security and fostering early savings habits amongst children, the Reserve Bank of India (RBI) has allowed banks to allow minors above the age of 10 years to open and operate savings/ fixed deposit accounts independently.
The RBI has released guidelines on opening and operation in the deposit accounts of above the age of 10 years. The RBI circular mentioned that the minors would be allowed to open and operate savings and term deposit accounts through a legal guardian. The central banking authority issued the circular addressed to all commercial banks and cooperative banks in the country.
The circular further read that the minors can open such accounts with their mother as guardian.
“Minors above such an age limit not less than 10 years and up to such amount and such terms as may be fixed by the banks keeping in view their risk management policy, may be allowed to open and operate savings/ term deposit accounts independently, if they so desire, and such terms shall be duly conveyed to the account holder,” PTI quoted the RBI circular.
The RBI stated that when the minor account holder attains maturity, fresh operating instructions and specimen signature of the account holder should be obtained and kept on record.
“The banks are free to offer additional banking facilities like internet banking, ATM/ debit cards, cheque book facility, etc, to the minor account holders basis their risk management policy, product suitability and customer appropriateness,” the circular read.
The Reserve Bank directed the banks to ensure that accounts of minors, whether operated independently or through a guardian, are not allowed to be overdrawn and that these always remain in a credit balance.
The Reserve Bank of India (RBI) has issued new guidelines allowing minors above 10 years old to independently open and operate savings and fixed deposit accounts. Banks can set terms and conditions based on their risk assessment. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
