In a notable step forward, the Reserve Bank of India (RBI) recently allowed minors aged 10 years and above to open and manage their own savings and term deposit accounts. Just days later, the Deloitte Global Digital Banking Maturity Survey named nine Indian banks among 40 global digital champions in 2024.
At first glance, these two headlines might seem unrelated. But they both point to one thing: India’s digital banking system is undergoing a massive transformation, one that puts smartphones and young users at the centre of the action.
As more Indians rely on mobile phones for small, everyday payments, it becomes clear that our future financial habits are being shaped right now, often by the youngest among us. Empowering minors to take charge of their finances is no longer just a matter of convenience; it’s a necessity in this fast-changing digital landscape.
Why Minors Should Be Allowed to Manage Their Own Bank Accounts
Until now, minors could only open bank accounts with the help of a parent or guardian. But with the RBI’s new rule, they can now independently open and operate accounts starting at age 10. Why is this important? Because young people today are not just tech-savvy; they’re using that technology to make real-world financial decisions every day.
From ordering food on apps to buying school supplies, teenagers, especially those aged 14 to 18, often make small transactions without needing constant parental supervision. A minor’s own bank account, linked to digital payment systems like UPI (Unified Payments Interface), allows them to carry out these tasks independently and responsibly. It also encourages saving, budgeting, and planning, all essential life skills.
Why Kids Are Ready For Financial Responsibility
According to data from the Telecom Regulatory Authority of India (TRAI) in December 2024, India has over 700 million smartphone users and more than 1 billion mobile connections. Interestingly, the biggest surge in mobile usage since the COVID-19 pandemic has been among 10 to 19-year-olds. These users are not just scrolling through social media; they’re actively using smartphones for functional tasks.
Importantly, this trend is not limited to urban or well-off families. The Annual Status of Education Report (ASER) 2024 showed that over 75% of 14–16-year-olds in rural India were able to complete digital tasks on smartphones efficiently. This means the digital divide is narrowing, and more young Indians are becoming digitally competent across social and economic backgrounds.
Mobile Apps Are Driving India’s Payment Revolution
India’s payment ecosystem has seen a revolution in the past decade, largely driven by digital payment systems. UPI, for instance, has become the default method for small-value, everyday transactions. In 2024–25, the number of mobile payments was 37 times higher than net banking payments. However, in terms of value, mobile payments accounted for less than one-third of the total, showing that mobile apps are primarily used for small, regular purchases.
This clearly shows a behavioural trend: Indians, especially the youth, prefer using mobile phones for fast, cashless transactions like buying snacks, booking cabs, or paying for stationery. Enabling minors to have their own bank accounts will make it easier for them to use these apps without depending on their parents’ accounts or wallets.
Indian Banks Among the Best
India is fast becoming a global leader in digital banking. The Deloitte Global Digital Banking Maturity Survey 2024 identified nine Indian banks as part of the top 40 global digital champions. These banks stood out for offering user-friendly mobile apps, quick online onboarding processes, and seamless customer support.
This development reflects how India is not just catching up but leading in some areas of digital finance. By allowing minors to access banking services independently, the RBI is aligning domestic policies with international digital banking practices. This also signals that Indian regulators are ready to trust the younger generation with more financial responsibility.
Wallets, Apps, And New Use Cases
The market has already anticipated this change in user behaviour. Several financial tools have been introduced specifically for teenagers. Mobile wallets like Google Pay, which now allows users aged 13–18 to use wallets with parental controls, and pocket money apps like Junio, FamPay, and Fyp are designed for this age group. These services often don’t require a bank account but allow teens to make payments under parental oversight.
The introduction of UPI Circle in August 2024 was another step in this direction. It allows a secondary user, typically a minor, to make payments using the account of a parent or guardian. The RBI’s new rule simply builds on this existing trend, giving young users more options and flexibility.
Also Read: Banking For Dummies: Everything You Need To Know To Open Your First Bank Account
Catch Them Young
There’s an old saying in banking: “The earlier you start, the better your habits.” This is especially true when it comes to managing money. Right now, bank accounts held by minors form less than 1% of the total deposit base in Indian banks. That might sound insignificant, but the long-term potential is massive.
Once these minors become adults and start earning, they’re far more likely to stay loyal to the banks with which they already have a relationship. For banks, this is not just about deposits; it’s about building customer relationships that can last a lifetime.
From the regulator’s perspective, giving minors a head start in managing their accounts also helps promote financial inclusion and early financial education. Imagine a 14-year-old who uses their account to receive a monthly allowance from their parents, save for a school trip, or pay for tuition classes through UPI. These basic money-handling experiences – saving, spending wisely, and budgeting- can form the foundation of lifelong financial discipline.
Financial Participation = Financial Literacy?
But there’s another side to this story. Even though young Indians are active participants in today’s economy, many of them lack basic financial knowledge. A 2019 survey by the National Centre for Financial Education (NCFE) found that only 30% of Indians aged 18 to 29 were financially literate.
A more recent RBI study from 2023 found that adults under 30 scored lower in financial awareness than older age groups. In contrast, today’s youth are already borrowing and investing with surprising frequency.
A 2024 YouGov survey revealed that more than 20% of Gen Z respondents had taken a loan in the past six months, often from fintech companies or non-bank lenders. Meanwhile, the median age of new investors in India’s National Stock Exchange is just 32 years, and 40% of them are under 30.
Strategic Move
This creates a risky mismatch: young people are being given access to complex financial tools, loans, investments, and credit, but without a proper foundation in money management.
That’s why the RBI’s decision to allow minors to open and manage bank accounts independently is not just about convenience. It’s a strategic move to build financial capability early. It nudges young Indians to start learning how to budget, save, track expenses, and set financial goals, using their own bank account as a real-world learning lab.
Recognising the critical need for financial literacy, RBI Deputy Governor Swaminathan J. emphasised the importance of equipping youth with financial planning skills. He stated, “The idea of financial planning, budgeting, and saving needs to be instilled amongst people, especially the youngsters, to ensure financial discipline from an early age.”
He further highlighted that financial literacy empowers individuals to make informed choices about their money and utilise financial services appropriately, which is central to supporting inclusive growth.
Empower The Future, Today
India’s digital banking ecosystem is growing at lightning speed, and young people are at the heart of this transformation. By allowing minors to operate their own bank accounts, the RBI is not just tweaking a rule; it’s empowering an entire generation to take charge of their financial future.
Smartphones, UPI, and fintech apps are already part of their lives. Giving them regulated, independent access to bank accounts will help build good money habits early. Financial literacy, once reserved for adults, can now start in the classroom, the playground, or the family dinner table. And that, in the long run, is what will turn today’s children into tomorrow’s digital and financial champions.
Sources: The Live Mint, Economic Times, Times Of India
Image Credits: Google Images
Find the blogger: Katyayani Joshi
This post is tagged under: financial literacy, digital banking, RBI guidelines, youth finance, banking for minors, UPI India, mobile payments, fintech India, smart banking, financial education, Gen Z finance, money management, RBI India, digital India, youth empowerment, financial inclusion, smart saving, Indian economy, minor bank accounts, cashless India
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