SBI, ICICI allow kids to open and operate bank accounts, sign cheques and hold ATM cards
School-going children as young as 10 years will have to start working on their signatures with SBI and ICICI Bank now allowing them to open and operate bank accounts, sign cheques and hold ATM cards on their own.
These minor-operated accounts had been allowed by the Reserve Bank of India in May to inculcate savings behaviour among the young. The only condition was that minors should not be given any overdraft or credit facility.
SBI had launched new accounts 'Pehla Kadam' and 'Pehli Udaan' for kids to commemorate Teachers Day on September 5th. Now ICICI Bank has launched 'Smart Stars' account for minors. Both banks are offering full-fledged services to minors, including photo debit cards and access to mobile and net banking.
"We do not expect the child to go to the ATM unaccompanied. But instead of making it a guardian-operated account, we are leaving it to the parent to guide the child," Rajiv Sabharwal, ED, ICICI Bank. He added that for minor-operated accounts, there will be a limit on transaction amount. ICICI Bank is also talking to regular schools and boarding schools on using cards for payments within the premises.
Sabharwal said that as a safety measure, ICICI Bank has imposed a debit transaction limit of Rs 50,000 annually for minor-operated accounts. If the account is operated with a guardian's consent, the annual limit is enhanced to Rs 2 lakh.
SBI has said that its Pehli Udaan is available for all kids above 10 who can sign uniformly. A uniform signature is a prerequisite since the banks are not making any allowance in signature variation for children and cheques can be returned where signatures do not match.
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