Context:
The Reserve Bank of India (RBI) has introduced a progressive step toward financial empowerment of minors, allowing children aged 10 years and above to open and manage their own savings and term deposit accounts independently.
Key Provisions from RBI’s Circular
- Minors aged 10+ can now:
- Open savings or term deposit accounts without guardian oversight.
- Operate these accounts independently, including deposits, withdrawals, and checkbook use (as per bank discretion).
- Minors below 10 years of age:
- Can open accounts through a natural or legal guardian.
- Mothers may now act as guardians, expanding gender-sensitive banking policies.
Why This Matters
- Promotes early financial literacy: Encourages children to learn about money management, budgeting, and saving.
- Boosts financial inclusion: Especially impactful in semi-urban and rural regions where formal banking access remains limited.
- Supports Digital India and Jan Dhan goals: By integrating youth into formal financial systems.
Potential Use Cases:
- Monthly allowance savings
- Educational goal-based deposits
- Student-led savings clubs in schools
- Digital banking experience through UPI-linked accounts (if allowed)
This move reflects RBI’s forward-looking approach in nurturing a financially aware generation. It also paves the way for minors to gradually adopt digital payment tools under supervision, helping India transition into a more cashless and financially aware economy.
