New Delhi: In a significant departure from the current system where minors can only hold joint bank accounts with adults, the State Bank of India on Friday launched a scheme under which children above 10-years of age will be able to operate these accounts independently.
The first of its kind, the scheme was launched on a day when Prime Minister Narendra Modi addressed children across the country on the occasion of Teacher’s Day. 'Pehli Udaan', is a singly operated saving bank account under which children above 10 years of age can operate bank savings accounts independently and use facilities such as ATMs and cheque books.
'Pehla Kadam’ is a savings bank account for minor of any age operated jointly with his/her parent or guardian,” SBI said in a statement.
The scheme is being seen as a major plus for India where financial literacy is still limited. Under the scheme, all account holders will be given an exclusively designed photo ATM-cum-Debit card, it said.
Other features include internet banking with limited transaction facilities like bill payment, opening of fixed deposit and recurring deposits. The daily transaction limit has been kept at Rs 5,000.
Auto sweep with a minimum threshold of Rs 20,000 and inmultiple of Rs 1,000 with a minimum of Rs 10,000, it said.
While launching these products SBI Chairperson Arundhati Bhattacharya emphasised the importance of cultivating savings habits from childhood, managing and spending money wisely and also stressed upon the importance of inculcating good spending habits early in life.