Banking for teens

THE State Bank’s decision to allow teenagers to independently open and operate bank accounts is an important move as it brings a large, previously underserved segment into formal finance at the right age. In line with the SBP’s financial inclusion strategy for 2024-28, this intervention can help build early saving behaviour — crucial for a country like Pakistan with its historically low saving rates — and accelerate the shift towards a more documented and digitally transacting economy. For decades, financial inclusion efforts have focused almost exclusively on adults, leaving millions of teenagers at the margins of the formal system. By limiting teenagers to parent-controlled accounts, the system denies them a chance to develop financial agency. The new framework corrects this by recognising that financial literacy is best cultivated through practice, not supervision.

The potential gains are significant. Early exposure to banking can instil habits of saving, budgeting and digital payments at a formative stage. This is not merely about inclusion; it is also about the gradual formalisation of the undocumented economy. In an economy still dominated by cash and informal transactions, integrating millions of teenagers into the formal system could improve transaction traceability, reduce reliance on cash and, over time, support better documentation and tax collection. Thus, the opportunity is substantial, but its long-term value will depend on disciplined execution by banks through appropriate transaction limits, robust fraud and consumer protection controls, and strong financial literacy support so that early access leads to responsible and sustainable financial participation. Moreover, banks and fintechs must ensure products are affordable and accessible across both urban and rural areas. Otherwise, the benefits will remain confined to tech-savvy, higher-income segments. That said, through this intervention the SBP is not just expanding access, it is also investing in future economic participation. The framework is a welcome step towards a more inclusive, transparent and financially aware economy.

Published in Dawn, April 6th, 2026

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