Reserve Bank of India (RBI) deputy governor S.S. Mundra recently pushed banks to allow customers to move seamlessly between banks without having to change their account numbers. He also said the central bank would soon come out with final guidelines on customer protection to limit their liability in case of fraud in electronic banking transactions.
Technological innovation and linking accounts to Aadhaar, the ID number issued by the Unique Identification Authority of India, have made it easier to move towards account number portability, the deputy governor said at an event organized by the Banking Codes and Standards Board of India. Mundra also cautioned banks against charging higher rates on services.
Currently, bank account number portability doesn’t exist anywhere in the world. In India, mobile phone subscribers are allowed to port their numbers while the Insurance Regulatory and Development Authority of India is considering allowing life insurance policy holders to switch from one insurer to another without surrendering their existing policies.
“Account portability will be bit of a challenge from banks’ point of view since they have to change file structure given their core banking solution. The mechanism will evolve but it will be expensive,” said Ashvin Parekh, managing partner, Ashvin Parekh Advisory Services Llp.