9/27/2014

Mrunal SBI Pahala Kadam, Pahali Udaan, features Minor bank accounts

- Mrunal - http://mrunal.org -

[Banking] Minor Bank Accounts, SBIs Pahali Udaan,

Pahala Kadam, Kotak My Junior Account
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

Man arrested for stealing Miley Cy rus blow-up doll (BWNToday )

Topic was in news during May 2014. Again resurfaced in Sep 2014, when SBI launched
new products. Therefore Im 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 doesnt 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:
http://mrunal.org/2014/09/minor-bank-accounts-sbi-pahali-udaan-pahala-kadam-kotak-junior.html/print/

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9/27/2014

Mrunal SBI Pahala Kadam, Pahali Udaan, features Minor 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 lets 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 Mahindras 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 theyre pretty much
living on their own.

Anti-Argument
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 shouldnt have allowed the children to open accounts without
adult supervision.
Interview Question: Are you in favor of RBIs latest move of allowing Children to
open bank accounts without adult supervision? Yes / No / why?

SBI: Pahali Udaan, Pahala kadam

http://mrunal.org/2014/09/minor-bank-accounts-sbi-pahali-udaan-pahala-kadam-kotak-junior.html/print/

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9/27/2014

Mrunal SBI Pahala Kadam, Pahali Udaan, features Minor bank accounts

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 ATMcumDebit 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 doesnt 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
doesnt apply if parents are making recurring deposits (RD)

Published on 23/09/2014 @ 4:00 pm under Category: Economy

URL to article: http://mrunal.org/2014/09/minor-bank-accounts-sbi-pahali-udaanpahala-kadam-kotak-junior.html

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