Banking facility for minors

GN Bureau | May 7, 2014



To boost financial inclusion, the Reserve Bank of India (RBI) has allowed minors over ten years of age to independently open their savings bank accounts and run it without tagging themselves in joint accounts with a parent or guardian.

However, the RBI has given banks the liberty to give this facility and also fix the minimum age at which minors can can have savings bank accounts independently.

Under the new RBI guideline, the minors are to be given facilities like ATMs, internet banking, debit card and chequebooks. Such accounts, however, shall never be overdrawn, the RBI has said. Besides, the additional banking facilities shall conform to the banking norms.

Meanwhile, according to separate RBI circular, banks have been asked to stop the practice of levying penal charges on inoperative banks – savings and current accounts that have had no transaction for two years or more. Such charges lead to negative balance and customers are asked to pay up when they go to close their accounts.

Instead, the RBI has asked the banks to cut down on services available to the account holder till the time the minimum account balance is restored.

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