Mudarabah Savings Accounts for Minors

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A minor is a person that has not reached the "age of majority-" or the legal age i.e., the age of 18. Because of this, the minor cannot conclude a valid contract on his own. His guardian tutor concludes it on their behalf. The Ethiopian law is clear on this. (Refer to Art. 199, Sub-Art. 2 of the civil code). 

Product Features:

  •  The account is opened in the name of the minor, but it is operated by the guardian (parent or legal tutor).
  • The guardian's name and photo are attached to the account for identification purposes.
  • Only the guardian can open the savings account on behalf of the minor.
  • A birth certificate of the minor must be provided at the time of account opening and retained in the bank's records.
  • The account will include the designation "minor" in its title to differentiate it from other accounts.
  • The guardian is responsible for all deposits and withdrawals until the minor reaches the age of majority (18 years).
  • The guardian must sign all documents in a representative capacity, such as "For and on behalf of minor [full name of the minor]."
  • The guardian cannot withdraw more than 50% of the account balance at any one time.
  • Withdrawals are limited to a maximum of five times per year.
  • The account will be considered dormant if there are no debit or credit transactions for two consecutive years and will be transferred to inactive accounts.
  • Upon reaching the age of majority, the minor can take over and manage the account independently.
  • A new Account Opening Form must be signed by the former minor, along with fresh specimen signatures, upon attaining majority status.
  • The profit-sharing ratio for Mudarabah savings accounts for minors will be communicated periodically.
  • Customers should refer to the bank’s latest interest-free Mudarabah deposit terms and tariff directives for specific profit-sharing ratios (PSR).

Eligibility Requirements:

  • Only a parent or legally appointed guardian can open and operate a Mudarabah savings account for a minor.
  • If both parents are deceased, a guardian must be appointed by a competent court.
  • The account is specifically designed for minors, defined as individuals under the age of 18.
  • A valid birth certificate of the minor must be provided at account opening.
  • Additional identification documents may be required from the guardian.
  • The guardian must have legal capacity to act on behalf of the minor and must comply with relevant laws regarding guardianship.
  • Upon reaching the age of majority, the former minor must complete a new Account Opening Form and provide updated specimen signatures to continue managing the account.
  • The bank must fulfill all Know Your Customer (KYC) and due diligence requirements as per banking regulations before opening an account.