RBI allows Children Aged 10 and Above to Operate Bank Accounts on Their Own

In a major step to encourage financial awareness from a young age, the Reserve Bank of India (RBI) has announced new rules that allow children aged 10 years and above to open and operate their own savings and deposit accounts without needing a guardian.

The new rules, issued on April 21, 2025, are aimed at simplifying and updating how banks handle deposit accounts for minors. Until now, children could only operate bank accounts with the help of a parent or legal guardian. But under the revised guidelines, banks may now allow minors over the age of 10 to manage their accounts independently—if the bank feels it’s safe to do so, based on its internal policies.

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For children under 10, accounts can still be opened and operated by a parent or guardian, as has always been the case. Once a minor turns 18, they must provide updated documents and a fresh signature to continue using the account in their own name. Banks are expected to reach out and guide these account holders through the process of taking full control of their accounts upon reaching adulthood.

The RBI has also given banks the green light to offer additional services—such as debit cards, internet banking, and cheque books—to minors, depending on whether they consider the child ready to handle such facilities responsibly.

However, a strict rule remains in place: accounts held by minors must not be allowed to go into overdraft. In other words, these accounts must always have a positive balance.

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Banks are required to carry out proper identity checks before opening accounts for minors and must continue to monitor these accounts regularly, following the usual KYC (Know Your Customer) rules.

All banks have until July 1, 2025, to update their internal rules and policies to match the RBI’s new guidelines. Until then, current systems can continue as they are.

The circular, signed by Chief General Manager Veena Srivastava, reflects a shift in how the RBI views young people’s role in the financial system—encouraging a hands-on, responsible approach to managing money from an earlier age, which is laudable.

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