In a plan to boost financial inclusion, the Reserve Bank of India has allowed minors aged 10 or over to open a bank account independently and hold an ATM card.
Indian children over 10 years old no longer need the help of their parents or guardians to open and operate savings bank accounts, hold a debit card and cheque book and use ATMs.
The central bank stated: “Banks are free to offer additional banking facilities like internet banking, subject to the safeguards that minor accounts are not allowed to be overdrawn and that these always remain in credit.
“Banks may, however, keeping in view their risk management systems, fix limits in terms of age and amount up to which minors may be allowed to operate the deposit accounts independently.”
The documents required to open accounts by minors remain the decision of each bank, and, in the case of an account operated by a parent or guardian, fresh operating instructions and specimen signature of the minor account holder should be obtained and kept on record for all operational purposes.
Bank accounts designed for children and their parents are not rare in India, with options such as the ‘Young Stars’ account at ICICI Bank, the ‘Kids Advantage’ account at HDFC Bank and the ‘Power Kids’ account at IDBI Bank.