Opening of Bank Accounts for Minors latest RBI guidelines
The Reserve Bank of India (RBI) has revised its guidelines Opening of Account of Minors on the opening and operation of deposit accounts for minors. The Guideline No. RBI/2025-26/26 DOR.MCS.REC.17/01.01.003/2025-26 dated 21st April 2025 will be effective from 01 July 2025:
- Eligibility Accounts for All Ages: Minors of any age can open savings or term deposit accounts through their natural or legal guardian, including the mother, as permitted under a 1976 RBI circular. This ensures flexibility for parents or guardians to manage accounts on behalf of young children.
- Independent Operation: Minors aged 10 and above may independently open and operate savings/term deposit accounts, subject to banks’ risk management policies, with terms clearly communicated to the account holder.
- Transition to Majority: When a minor reaches the age of majority, banks must collect fresh operating instructions and specimen signatures. For accounts operated by guardians, the balance must be verified. Banks are also required to proactively inform minors nearing adulthood to ensure a smooth transition.
- Additional Facilities Banks may offer facilities like internet banking, ATM/debit cards, and cheque books to minors based on their risk management, product suitability, and customer appropriateness policies.
- Credit Balance: Minor accounts, whether operated independently or through a guardian, must not be overdrawn and should always maintain a credit balance.
- KYC Compliance: Banks must conduct customer due diligence for opening minor accounts and ongoing due diligence as per the RBI’s KYC Master Direction, 2016, as amended.
For parents and guardians, these guidelines offer greater flexibility in opening accounts for children. Accounts can be opened with the option to involve mothers as guardians. For minors above 10, the ability to independently manage accounts fosters financial literacy, while safeguards like mandatory credit balances and KYC compliance ensure security.
Banks must align their policies with these guidelines by July 1, 2025, and existing policies can continue until then.
Read rbi guidelines on current account.
