The Reserve Bank of India (RBI) has released revised guidelines for the opening and operation of deposit accounts by minors, aiming to streamline and unify the current framework across all banks.
The new rules will apply to all Commercial Banks, Urban Cooperative Banks (UCBs), State Cooperative Banks, and District Central Cooperative Banks, with an effective date of July 1, 2025.
As per the circular issued, minors of any age may open and operate savings and term deposit accounts through their natural or legal guardians, including mothers, in line with an earlier RBI directive from 1976. In a progressive move, minors aged 10 years and above can also be permitted to independently operate such accounts, subject to terms and limits defined by individual banks under their internal risk management policies.
Upon attaining the age of majority (18 years), banks are required to obtain fresh operating instructions and updated specimen signatures from the account holders. In cases where the guardian was operating the account, banks must also confirm the balance and proactively communicate these procedural changes to the minor account holder.
Additionally, banks are allowed to extend digital banking facilities such as internet banking, ATM/debit cards, and cheque books to minor account holders based on product suitability, customer appropriateness, and associated risks.
The RBI has made it clear that minor accounts must always remain in credit and cannot be overdrawn. Furthermore, banks are instructed to perform strict customer due diligence (CDD) during account opening and conduct regular reviews in line with the provisions of the Master Direction on Know Your Customer (KYC), 2016.
These new guidelines have been issued under Sections 35A and 56 of the Banking Regulation Act, 1949, and banks are expected to align their internal policies accordingly. Until the new rules come into force, the existing guidelines may continue. All previous circulars related to minor accounts, as listed in the annexure, will stand repealed from July 1, 2025.
The circular was signed by Veena Srivastava, Chief General Manager at RBI, highlighting the regulator’s continued focus on modernizing banking operations and ensuring responsible financial inclusion for minors.
