In a significant shift from traditional banking norms regarding eligibility to open and operate individual accounts, the Reserve Bank of India (RBI) on Tuesday issued revised guidelines allowing minors above the age of 10 to independently open and operate savings bank accounts, should they wish to do so.
This initiative aims to promote financial inclusion and bring uniformity to the process across banks. Key highlights of the guidelines include granting minors the autonomy to manage their own accounts and giving banks the discretion to implement this policy as per their internal protocols.
According to the guidelines, minors aged 10 years and above can open and operate savings bank accounts without the need for a guardian.
With regard to the discretion granted to banks, the RBI stated that individual banks may set their own limits on the age and amount up to which minors can independently operate these accounts. Banks are also allowed to determine the minimum documentation required for opening such accounts.
According to banking sector experts whom the New Indian Express discussed the implications of this shift, banks can potentially expand their customer base by early customer acquisition, family-wide engagements and cross selling opportunities.
"By allowing minors to open accounts independently, banks can engage with customers at a much younger age. This early relationship-building can translate into long-term customer loyalty, especially if the bank offers user-friendly, educational tools for young account holders," said a senior banking sector executive, who doesn't want to be identified.
Banks could also attract entire families by offering bundled or linked products—like accounts for parents and children with shared benefits, incentives, or oversight options—thus broadening their customer base organically, he added.
"Once a minor becomes a customer, banks can later offer them additional products as they grow—such as educational loans, student credit cards, or investment options. It creates a pipeline of future clients already familiar with the bank’s ecosystem," he explained.
Furthermore, the RBI guidelines stated, banks may offer additional facilities—such as internet banking, ATM/debit cards, and cheque books—to minor account holders, provided that these accounts are not overdrawn and always remain in credit.
Upon reaching the age of majority, the account holder must confirm the balance in their account. If the account was previously operated by a guardian, fresh operating instructions and a specimen signature of the now-adult account holder must be obtained for continued operation, the new norms say.
Another major opportunity the banking industry see with this new chunk of young customers is a boost in digital banking adoption.
Offering minors internet banking, debit cards, and mobile apps fosters early adoption of digital banking services, which is a key focus for modern banks. Tech-savvy young customers can help banks increase app downloads, online engagement, and transaction volumes.
The competitive differentiation is the other booster that comes with this shift in the banking system.
Banks that proactively design child- and teen-friendly banking products—with gamified saving goals, financial literacy tools, or reward-based systems—can differentiate themselves in a competitive market.
However, these opportunities are not without challenges.
"There are certain operational risks while dealing with the young customer base. Banks must ensure strong safeguards to avoid misuse, especially since these accounts cannot be overdrawn. Balancing a child’s independence with appropriate oversight will be key," says another veteran banker.
Banks will, however, need to invest in tailored offerings such user friendly digital experience and targeted communication strategies, etc.
The RBI had on Monday noted that these revised guidelines are intended to empower young individuals to manage their finances responsibly and encourage early financial literacy.