10-year-olds can open and operate bank account alone: RBI

Children older than 10 years will no longer need the help of their parents or guardians to open and operate a savings bank account. To boost financial inclusion, the Reserve Bank of India (RBI) on Tuesday said that banks were at liberty to allow minors above 10 years to independently open and operate savings bank accounts. As of now, banks allow minors to operate bank accounts only along with a parent or a guardian. All children and teenagers below the age of 18 are considered minors under current rules.

RBI also allowed banks to offer additional facilities like internet banking, ATM, debit card and chequebook to a minor. However, the central bank said that such facilities should be within the overall norms that banks will not allow a minor's account to be overdrawn and that these accounts should always remain in credit.

However, RBI has given the leeway to banks to fix the minimum age at which they will allow minors to operate savings bank accounts independently. Banks can also fix a maximum limit on money such minors can have at their disposal through such account. Banks can also decide on what kind of documents will be needed to open accounts by minors, a notification from RBI said.

In a separate notification, the RBI said banks cannot slap charges on customers for not maintaining the minimum balance in inoperative savings and current accounts — in which no transactions have been made for two years. The central bank had announced this change in its April 1 monetary police and was made effective on Tuesday.

In its last policy meeting document, the RBI had also said that banks should not take undue advantage of customer difficulty or inattention relating to banking services. "Instead of levying penal charges for non-maintenance of minimum balance in ordinary savings bank accounts, banks should limit services available on such accounts to those available to Basic Savings Bank Deposit Accounts and restore the services when the balances improve to the minimum required level," the policy document had said.

In recent times, there have been cases where due to penal charges in inoperative accounts, customers had negative balances. And when they went to close such accounts, they were asked to pay up. The latest RBI circular will avoid such situations.