FILE PHOTO: Reserve Financial institution of India (RBI) emblem is seen inside its headquarters in Mumbai, India, April 6, 2023. REUTERS/Francis Mascarenhas//File Photograph/File Photograph(REUTERS)
The RBI issued revised directives on opening deposit accounts and working them within the case of a minor, in a round addressed to industrial and cooperative banks.
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“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,” it stated.
Additional, the RBI said that after one turns into an grownup, recent working directions ought to be offered, and a separate specimen signature of the account holder ought to be obtained and stored on file.
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The RBI added within the round, “The banks are free to offer additional banking facilities like internet banking, ATM/ debit cards, cheque book facility, etc, to the minor account holders based on their risk management policy, product suitability and customer appropriateness.”
RBI directives for all minors
The RBI, in its revised directives on opening the deposit account and operation of the accounts of minors, said that minors of any age can open and function financial savings and time period deposit accounts by their pure or authorized guardian.
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It’s particularly famous that such accounts may also be opened with the mom because the guardian.
As per the RBI tips, banks can be required to make sure that accounts of minors, whether or not operated independently or by a guardian, aren’t allowed to be overdrawn and that they at all times stay in a credit score steadiness.
Moreover, banks may also carry out buyer due diligence for opening of deposit accounts of minors and undertake ongoing due diligence.
Banks should make new insurance policies or amend their current insurance policies aligned with the brand new directives, newest by July 1, 2025.