Just like your mobile number, you could soon move your account from one bank to another without having to change the account number.
Batting for the move, RBI deputy governor S S Mundra said technological innovation and linking accounts to Aadhaar can make it easier for this to happen. Mundra was speaking at an event organized by the Banking Codes and Standards Board of India.
How does this help?
For unhappy banking customers, this could be a relief as it will save them the trouble of going through the process of opening a new bank account each time they want to switch banks. This will also help you do away with multiple bank accounts. The enhanced competition could lead to better services too.
But will banks oblige?
Taking this step is not going to be an easy task for banks as there are many loopholes that need to be addressed on the technology and data-integration front. Adhil Shetty, CEO of Bankbazaar, says, “Banks will have to restructure their account numbering systems. Many of them have different methods and streamlining these will take time. This will also involve changes in their software integration systems.”
Another roadblock could come in the form of know your customer (KYC) procedures. The KYC and the due diligence done vary between banks and may not be accepted uniformly. Experts believe that there are chances that some people may switch banks too often to escape the net of the Prevention of Money Laundering Act. So, banks need to have a secure KYC norm in place to distinguish the genuine customers from the fraudsters.
A report on bank account number portability by Finacle, the banking solutions product of Infosys Technologies, states that this facility is already present in Europe and Australia in different forms. In the United States, every bank account number indicates the bank and pin code of the branch owning the account. However, the mechanism to handle subsequent bank switches is still not in place.