Risky experiment

The SBP's recent decision to allow teenagers as young as 13 to open and operate bank accounts entirely on their own is meant to create an opportunity for children to gain financial literacy early and through hands-on experience. The new child account category is a fully functional digital wallet with almost identical usability to a standard account, except that it does not allow checkbooks, which even adults rarely use in this day and age.

Though well-intentioned, allowing children who have barely hit puberty to operate bank accounts with no oversight is a reckless gamble that goes against international norms and common sense. Financial literacy is best taught through guidance from parents and teachers, and through public awareness. Pakistan's decision is in contrast with practices in most developed and emerging economies. In the US, individuals must usually be at least 16 to open an account, and require close scrutiny if they do not have parental authorisation. Similarly, in the UK, 16-year-olds can open accounts, but parental consent and oversight are the norm for younger children. The pattern holds across Asia and the EU, with Japan, Singapore and Germany among the developed nations that require people to be 18 or have parental consent. In fact, one of the few outliers is India, where recent legislation allows children as young as 10 to operate bank accounts independently. However, keep in mind that this decision was taken by the same economic masterminds whose currency demonetisation tanked the Indian economy in 2016 while failing to convert cash users to digital.

By discarding established international safeguards, Pakistan is creating a generation of financial lab mice. While financial literacy is admittedly lacking even among parents, teenagers are still vulnerable to online scams, predatory marketing and generally impulsive behaviour. Independent access to bank accounts also opens the possibility that children may unwittingly engage in questionable investment activities if safeguards are not in place. The SBP must reconsider this decision and bump up the minimum ages to at least 16.