[Banking] Minor Bank Accounts, SBI’s Pahali Udaan, Pahala Kadam, Kotak My Junior Account

MrunalEconomy29 Comments

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  1. Banking rights for Bachchaa Party
    1. Pro arguments: Minor Bank accounts
    2. Anti-Argumens: Minor Bank accounts
  2. SBI: Pahali Udaan, Pahala kadam
  3. Kotak My Junior Account

Banking rights for Bachchaa Party

Topic was in news during May 2014. Again resurfaced in Sep 2014, when SBI launched new products. Therefore I’m combining the two topics for quicker revision.

System, until now:

  • Children below 18 are “minor”
  • Minor cannot have separate account
  • They can open joint account with adults. Father natural guardian. Later RBI also authorized mothers. (But doesn’t apply to Muslim minors)
  • If guardian dies, minor will get money from account only after attaining majority. (Bollywood movies exploit this premise by introducing an evil uncle).
  • Minor should be literate
  • Two minors cannot open joint account
  • Minors can sign cheque.

RBI reform May 2014

  • All minors can open bank accounts via parents/ legal guardian.
  • BUT Minors above 10 years can open bank account without adult supervision
  • AND they can open only three type of Bank accounts:
  1. savings account
  2. fixed deposit account
  3. recurring deposit account.
  • In other words, they cannot open Current account, meant for businessmen.
  • Can get ATM card, cheque books, netbanking facilities

Safeguards for minor accounts

  • Bank cannot charge penalty if minimum balance not maintained. (this applies to all minor and major accounts, after 1st April 2014.)
  • But bank should ensure that such accounts remain in credit. Meaning children should not be allowed to totally empty his balance.
  • Bank can put restriction of money withdrawal e.g. not more than 500 in 24 hours.
  • Bank can decide minimum documents.

Now let’s see pro and anti-arguments for group discussion / interview:

Pro arguments

  • This will bring uniformity in the bankaccounts. Some banks already offering separate minor accounts e.g. Kotak Mahindra’s My Junior account.
  • Financial awareness, financial literacy: children learn about savings habit and banking system.
  • Financial discipline: They understand the value of money and difference between “needs” vs “wants”.
  • Financial inclusion: e.g. child-laborers in tea-stalls can save money.
  • Government directly sends scholarship money to such account.
  • Social change: many urban teenagers have broken family they’re pretty much living on their own.


  • Children more Gullible, and likely to be victims of identity theft, hacking, phishing.
  • They can become victim of miselling by private banks via Bancassurance, mutual funds and hidden charges on credit card.
  • Therefore, RBI shouldn’t have allowed the children to open accounts without adult supervision.

Interview Question: Are you in favor of RBI’s latest move of allowing Children to open bank accounts without adult supervision? Yes / No / why?

SBI: Pahali Udaan, Pahala kadam

Sep 2014: SBI has launched two products, after RBI guidelines on minor-accounts.

Pehli Udaan Pehla Kadam
Age: 10 years and above any age
Singly operated savings bank account Jointly with his/her parent or guardian


Transaction limits
Netbanking Rs.5000
Mobile banking Rs.2000

What are the benefits offered?

  • Specially branded passbook, cheque book,
  • Personalized photo ATM—cum—Debit card.
  • Internet banking with limited transaction facilities like bill payment, opening of fixed deposit, recurring deposits, etc.
  • Auto-sweep facility also available- meaning, part of the savings account money will be transferred to fixed deposit account-, thus kid can earn more interest.

Kotak My Junior Account

  • Savings account for kids, Launched in 2013, June.
  • Child alone cannot operate it without guardian.
  • Child is given a ‘membership’ card- to purchase kid products from variety of online and retail stores, at discount.
  • Only kids aged 10 years and above, can get debit card. But with withdrawal limit of Rs.5000/- per month.
  • 6% interest on savings account per year– only if balance above 1 lakh rupees. This rate doesn’t apply to NRI kids’ accounts.
  • Parents can also make recurring deposits (RD) to this account and earn 8%. In this case, Kotak provides free movie tickets and book vouchers.
  • Penalty charges apply, if minimum balance (Rs.5000) not maintained. This rule doesn’t apply if parents are making recurring deposits (RD)
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29 Comments on “[Banking] Minor Bank Accounts, SBI’s Pahali Udaan, Pahala Kadam, Kotak My Junior Account”

  1. many banks are already opening saving account for minor without natural guardian ,operated by singly
    above age group 10 ,bank of maharashtra is one of them….
    so what is the relevance hahaaaaaaaa…………

    1. @pradeep kumar. The relevance is to harass people who are preparing for bank jobs like me… ;)

    2. opening saving bank account for 10 years and above minors has been permitted by RBI without natural guardian .The rational
      is now 10 years and above minors are fully capable and their I Q are now up to the mark of handling such facilities properly. Not only
      bank of Maharashtra but a lot of banks are doing so and they got very positive results.

      Anal Gupta,SBI Tekari(Gaya)

    1. imran rule says father is natural guardian. and if father is alive then to make mother natural guardian mother ascent is needed. and if father is not alive then court of law will decide his guardian. so here is slightly difference b/w guardian and natural guardian

  2. if sohan while selling two goats at the same prise, makes 10 % profit on one and 10% loss on other then he makes what % of profit OR wht % of loss OR no profit no loss………………………Please whts the ans explain?

    1. See its a very simple question. a simple trick can be used in such type of question.

      10-10-10*10/100 = -1 % loss……
      less than 20 seconds

      1. formula is a+b+a*b/100
        where a and b are profit and loss respectively
        and sigh will come according to profit(+) and loss(-)

    2. No profit No Loss. B’coz the % is applied on 2 different goats.
      lets say CP of each goat is 100. 1st goat (maaaaa…) sold at profit SP=110, profit=10
      2nd goat sold at loss SP=90, loss = 10..
      therefore NO p NO L.

      1. Abinva ..Ur answer is wrong .Because selling price of both the product is same not the cost of product is same . Ur answer would be right in case of cost of product

        2-In such cases simple formula is -A*A/100 where a is he percentage of profit and loss .In this case it will be -10*10/100=-1%

  3. what is the differnce between saving and current account. Why minor cant open current account which is limited to buisnessman only ?

    1. Avinash, Current account gives 0% interest rate but provides facilities for businessmen like no limits on daily transactions, thicker cheque book, can get account statement anytime etc. facilities which are not required by normal service class people or minors.

    2. saving accounts are meant for saving purposes and transactions are limited above which charges applied.interest is paid
      on credit balance of saving bank account.
      No interest is paid on current account. one can deposit and withdraw in unlimited no. of transactions.C A may be personal
      by name or may be institutional.
      Minor is not valid for contract.Minor can enjoy profit but not allowed to do business hence minor can’t open CA.

  4. I do not think there was a rule before which prohibited minors to open a bank account. I had a bank account in my name ( not joint) when I was 10 years of age in sixth class , so I dont know why people are saying earlier minors could not open a bank account. Can someone confirm it please??

  5. it can be solved by following way

    (10)2\100=1,nd der will be always loss if one thing sell on profit nd 2nd one on loss (it’s applicable only when profit nd loss %ge are same).
    (note-2 is symbol of square)

    Another example-if 20% profit nd 20% loss then;
    (20)2\100=4 i.e 4% loss

    Other 30% profit nd loss- 9% LOSS
    40% p nd loss-16% loss
    so no need to calculate ,only remember the square of 1,2,3,4,,,,,,

    ANOTHER QUESTION-if any one buy 2 article one on 10% profit and another on 10% loss then der will be alwas no profit nd no loss.

  6. After 1st April 2014, no penality charge, if minimum balance not maintained. Then why u mention that penalty 5000 if minimum balance not maintained. Please explain?

    1. That 5000 limt was in with reference to kotak , guidelines of which came in 2013. Are u also preparing for sbi interview?

  7. Safeguards for minor account: You have written that “this applies to all minor and major accounts, after 1st April 2014”.

    I want to add that this rule is applicable for dormant account. If one has non-operative account than banks cannot fine for non-maintenance of minimum balance.

    I was charges Rs 750/- by bloody Yes Bank for not maintaining minimum AQB.

  8. It a great opportunity for the minor who want to open there account and the best minor account for minor will be pheli udaan which is offered by sbi and as sbi is a state bank which will be available in all states in india and as in pheli udaan the minor can use his account without the undersigned of there parents so i request all the reader to go for pheli udaan ..thank u!!!!



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