Bank account number portability by RBI
RBI is pushing for bank account number portability on the back of factors such Aadhaar enrollment.
Deputy Governor S S Mundra warns lenders against using charges on maintaining minimum balance to deny services to customers.Customers may soon get to seamlessly switch to another bank with the same account number without losing any transaction details such as credit/debit history — all thanks to Reserve Bank of India’s push.
Reserve Bank Deputy Governor S S Mundra on Tuesday batted for introduction of bank account number portability saying that it “has come within the realms of possibility” with the technological advancements in the payment system.
Mundra, who first advocated account portability a couple of years ago, said, “back then the concept might have appeared somewhat abstract but with technological advancements in the field of payment system such as UPI etc, coupled with massive enrolments under Aadhaar and their linkage to individual bank accounts, it has come within the realms of possibility.”
With increase in Aadhaar enrollment and technology advancements, banks and stakeholders must start thinking and prepare for bank account number portability to be made into reality, said the Reserve Bank of India on Tuesday.
Bank account number portability allows a banking customer to retain an account number even if she or he switches to another bank. A similar facility in the telecom sector — Mobile Number Portability — lets subscribers change telecom operators without losing the mobile number in use.
Two Key Enablers
The two key enablers for this in the Indian banking context are Aadhaar as the unique identification for customers and National Payments Corporation of India (NPCI) as a central payment system.
“In the last two years, the way we have moved, the Aadhaar enrolment has happened, platforms creation by NPCI, many apps have been introduced to do the IMPS (immediate payment service). With all these I think, the time has come that account number portability is a very much in the realm of possibility,”
said RBI Deputy Governor SS Mundra at a banking event organised by Banking Codes and Standard Board of India (BCSBI).
“This is better if it comes with combined efforts of the stakeholders than a regulatory prescription. I think IBA (Indian Banks’ Association) should take a note of it and start working with it,” he added.
The Indian telecom sector has already adapted the idea making it easier for customers to switch operators retaining the same mobile number driving higher competition and pricing for people.
According to Mundra, once that happens then you will have a silent customer who would simply move away without even talking to you. “Both way banks should prepare for that eventuality and all the stakeholders should start thinking that how the account number portability can be made a reality in the Indian banking sector,” he added.
Today there are multiple numbers such as the IFSC code, bank account number, mobile money identifier (MMID) number for IMPS, customer relationship number, etc to identify one specific bank account.
Aadhaar payments bridge system
This can be made possible with the Aadhaar payments bridge system (APBS) developed by the Unique Identification Authority of India (UIDAI) and NPCI. The APBS can route transactions to an individual based on his Aadhaar number if the bank details are linked to Aadhaar.
Mundra had in the past floated bank account portability. If the plan succeeds, India will be the first country to adopt such a system.
In April 2012, the banking regulator had asked banks to allow intra-bank account portability in cases where full KYC (know your customer) details of the concerned account had been ascertained and a customer could operate and use the same account number across any branch of one bank.
“The RBI would be extensively focused on mis-selling of third party products, violation of KYC guidelines, imposition of usurious service charges during the current year’s supervisory cycle. Further as you are aware, RBI has specifically established a department for examining the instances of regulatory violations with a view to taking enforcement actions on the errant banks,” he said.
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