Reserve Bank of India (RBI) has allowed children over 10 years to open and operate their bank accounts independently from 6 May 2014. This article covers information about the change in opening of children’s bank account. Why RBI feels that children should be able to handle their own account? How much does a 10 year old understand about the economy and what did she do about it? What do today’s girls of 16-17 age think about money, what they look from husband and future.

Children Bank Account : Independent Operation

Reserve Bank of India (RBI) has allowed children over 10 years to open and operate their bank accounts independently from 6 May 2014. Till 5th May minors’ accounts (fixed, recurring and savings deposit accounts) could be opened and operated under the supervision of parents or guardians. So far, only individuals above the legal voting age of 18 years were allowed to operate their accounts.  RBI has left it to the banks to frame guidelines on operating the accounts. It’s up to the banks to set limitations on withdrawals and value of transactions. Banks can also decide, in their own discretion, as to what minimum documents are required for opening of accounts by minors. Banks are free to offer additional banking facilities like internet banking, ATM/debit card, cheque book facility etc., subject to the safeguards that minor accounts are not allowed to be overdrawn and that these always remain in credit.The aim is to get children to understand money matters and feel empowered. It will allow them to enter the banking system earlier. The latest change has been done with a view to promote the objective of financial inclusion and also to bring uniformity among banks in opening and operating minors’ accounts, RBI said. For details one can read  RBI Circular on Opening of Bank Accounts in the Names of Minors

Some of the questions that came to my mind on reading about RBI notice were : Has RBI done the right thing? Will parents take the initiative and open such accounts for their children? We want our children to be prepared for future. Sadly we don’t talk much about money with kids. Kids grow up seeing parents, neighbours, relatives and grow up with half cooked ideas. Infact I started bemoneyaware.com to teach my kids about money.  Though I was educated, had a engineering degree from a premier institute in India , I was financially uneducated. Till I had kids I did not think much about learning about money, doing what my parents or inlaws told us to do.

Coming to the question : Are children ready to handle such a responsibility? I am sharing with you two articles that I read which made me think that we tend to underestimate the kids. I am reminded of the new Tata DoCoMo ad where a father wants to talk to his 16 year old about Girls and boy says Yes Papa what do you want to know about it. You can see it on Youtube by clicking here .

• One is a V standard girl writing to RBI governor Raghuram Rajan offering her $20 which she saved . This happened in Sep 2013 when the government and RBI were battling a major crisis with the rupee hitting record lows and the current account deficit going beyond acceptable level
• Second is the article A Conversation with Today’s Girl! by Vinita Dawra Nangia where she wrote about the talk with four teenagers revealing an amazing level of emotional maturity and confidence.

Letter to RBI Raghuram Rajan by V Standard Girl

Quoting from Economic Times May 1 2014, A class V girl offered to help RBI governor Raghuram Rajan

One doesn’t expect a fifth grade student to be worried about the state of the economy and the country’s foreign exchange reserves, much less pen a letter to the Reserve Bank of India governor offering help. But last September, when the government and RBI were battling a major crisis with the rupee hitting record lows and the current account deficit going beyond acceptable levels, Laila Indira Alva, a class V student of Sanskriti School,Gurgaon wrote to central bank governor Raghuram Rajan.

“I have heard about the crisis our economy is facing… I have also heard about the fall of the rupee with respect to the dollar,” Alva said in the letter to Rajan, which has now been published in her school magazine. But unlike several others who complained about the curbs, such as those on importing gold, to check the deteriorating forex situation, the girl from Gurgaon went on to offer help. “I have saved $20 on my last trip abroad with my parents. I thought that I could use it but the country needs it more than I do,” the letter dated September 5 said.

Rajan, who had just moved to Mumbai to take charge as RBI governor, wrote back to commend Alva’s response although he refused to tap into her savings. “I am deeply touched by your kind gesture. I am aware that this is a challenging time for the country and I have no doubt that the economy will emerge stronger,” the RBI chief assured the student.”I am returning the 20 not (note) that you had sent with the assurance that we have adequate foreign exchange reserves in RBI to manage the situation,” Rajan wrote on September 12, when the foreign exchange reserves were hovering around the $275 billion mark.

Where did the girl know about dollar crisis? My guess is she travelled with parents to foreign country and would have picked up the conversation about how expensive dollar has become , about crisis of our economy.  She knew RBI Governo(how many adults do), she offered whatever she saved and had courage to write to RBI governor Raghuram Rajan. I still can’t think of writing  to RBI governor to read my blog ;-(.  Her parents did not discourage her to write . If she is guided properly then will she not be able to handle her bank account? I think she and many kids like her can but are parents ready to take the challenge? With so much on parents shoulder, studies, extra curricular activities can parents find time and energy to give them money values. Sometime back our  reader Chetan shared What I learnt about Money from my Parents shows what we learn from parents stays with us even when we grow.

 What do today’s girls want? A Conversation

Do you think that girls aged 16-17 can talk expectations from the future, husband..I didn’t till I read this article  from  From Times Of India A Conversation with Today’s Girl! by Vinita Dawra Nangia.

This conversation with four girls in the age bracket 16-17 left me zapped at the emotional maturity and confidence levels of young girls from a privileged background today. A freewheeling discussion on expectations from life and relationships reveals an understanding far beyond their years. They expect to work for the kind of life they wish to lead, and have very simple expectations, if any, from the men in their lives – loyalty and nicety. Without a trace of cynicism, these girls admit that their only expectations are from themselves.

The talk happened with four girls, though I am presenting them as one for greater clarity (they all consulted each other and agreed on what was said). I am sharing the conversation because I believe it is an eye-opener. We think our children are immature and cannot make their own choices. Whereas I do not say these four represent all young girls today, but still they do represent the educated, upwardly mobile, cosmopolitan teenage girl. Read on…

On love and sex

“What do emotions have to do with sex? Sex is just sex, a need you satisfy like any other itch. Please don’t confuse the two. Sex lost its emotional value sadly. Sex and emotional intimacy are two different things. You can have sex with anyone, but save intimacy for just a few. I may have sex with someone I do not fall in love with, and on the other hand, I could even be deeply and emotionally involved with someone I never wish to have sex with! I may just like to talk with him, share my feelings, consult him, but not be attracted to him physically at all.When you love someone and commit to the person, it is another matter. When you commit, it has to be total.”

On expectations from the future

“A life of financial comfort and social acceptability (friends and dating) comes above my aspirations of marriage and having children. I’m not saying that I wouldn’t have children. However, I do see children as a hindrance to my professional life.”

Do you see a husband as a hindrance too?

“Haha, no, not at all. I would like to find a dependable spouse relatively early on. I would be happy with just someone loyal, who is there for me when I need to talk. Just a nice person, because nicety is really where a lot of other characteristics stem from. I would never settle for someone as a compromise. Remaining single is no big deal.”

Do you expect your partner to contribute towards a good life for you?

“I will build the life I wish to on my own and be responsible for it. It is my responsibility to become what I want to be. I can’t blame anyone else for how I am.”

What if you had to support the man in your life?

“I would be more than okay with supporting him financially as long as he is doing something I am able to respect. However, if I thought he was just lazy and wasn’t using his potential, I could not get myself to respect him and then the relationship would not survive. I believe everyone has a moral obligation to the society.”

You are all so grown up and so mature!

“Yes, true. We grow up much too early (chuckles). But really, it’s sad. I regret growing up too early. It’s just too much stress too early on in life. I feel like my brain has been slowly just disintegrating from stress, but really, life is just supposed to be beginning for me, right?”

Okay we are talking about girls from privileged background. But this over a period of time the thoughts, change would trickle down..I mean change has to start from somewhere , somewhere small before it becomes big . Gone are the days when a girl was taught “Study and get married, look after your husband and kids”. Today parents send their daughter to as good a school as their son, mostly co-ed (unlike my time when parents preferred girls/boys school). Girls  are being told to stand on their feet and think about using their talent and earn money.  .Infact I see many families who just have one daughter are pretty happy about it, their friends do not ask them “Oh you have only daughter. Don’t you want to try for son?”   Boys are being told to help in kitchen/running of house. Newspapers, Magazines are full of ads talking about grooming for men.As a parent (I had two children a teen and one who soon will be in double digit) believe me it scares  me ! I wonder what did the father in Tata Docomo ad (about teaching his son about girls) did next?

Related Articles :

• My experiments with money : My own journey with money. How I realised after having child that I am financially illiterate.
• If only I had taught him about Money when he was a kid.. : If you don’t teach your kids about money at young age, who faces the consequences
• What are you teaching your kids about money?
• Kids and Money Conversations : Kids talk about money, directly or indirectly. Check out the conversation.
• Books on Money for Children
• Is It a Need or a Want? : Teaching kids about what is want or need.

Our website Bemoneyaware.com has articles organised on Bank, Plastic Cards, Earning money, Spending money, Understanding Indian Rupee,history which will be helpful for kids . Kids Let’s learn about money. You can see excerpt of our book on money for kids  You can also download the first chapter of our book from here.

What do you think the children these days think about money?How are you preparing your children about money, finances? When did get a bank account ? When do you plan to open bank account for your child? Do you think RBI has done right thing in allowing kids to handle their money? We look forward to hearing from you.