The Reserve Bank of India on Monday permitted banks to allow minors above the age of 10 years to open and operate savings and term deposit accounts independently. The banks are free to offer additional banking facilities like internet banking, ATM/ debit cards and cheque book facility to the minor account holders on the basis of their risk management policy, product suitability and customer appropriateness, the RBI said in a circular.
Earlier, while minors were allowed to open savings account only, now they can open both savings and term deposit accounts. The existing RBI rules do not mention about giving net banking, ATM/ debit card and cheque facility to minors.
The RBI also said minors of any age may be allowed to open and operate savings and term deposit accounts through his/ her natural or legal guardian. “They may also be allowed to open such accounts with mother as guardian,” it said.
In a circular to banks, the RBI aid, “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.”
“On attaining the age of majority, fresh operating instructions and specimen signature of the account holder should be obtained and kept on record,” the RBI said. Moreover, if the account is operated by the guardian, the balance will be got confirmed. The banks should take advance action, including communicating these requirements to minor account holders attaining the age of majority, to ensure fulfilment of these requirements, the RBI said.
The banks should ensure that accounts of minors, whether operated independently or through a guardian, are not allowed to be overdrawn and that these always remain in credit balance, the RBI said.
