Banking News

Accounts in the name of minors

Banks had always allowed minors to operate accounts but the age at which this was allowed had differed from bank to bank. Some banks wanted minors to be able to sign 'uniformally'. Since signature verification was the key in identification until the advent of the PIN/Password or Bio-metrics, the ability to sign more or less the same way at all times was critical to operate an account. But most of the fears were unfounded and as is often the case, a push from RBI gets things moving. RBI has now advised that minors above the age 10 years may be allowed to open and operate savings bank accounts independently. Banks, may, however, fix limits up to which the accounts may be operated, taking age into account. Readers will note that current accounts are not allowed for minors because of the possibility of an inadvertent overdraft. Minors cannot contract and a debt from a minor cannot be collected in courts of law.
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