Indian central banker floats account number portability

A senior Indian central banker says that the industry should investigate the introduction of account number portability, making it easier for customers to switch providers.

  12 4 comments

Indian central banker floats account number portability

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

In a speech, Reserve Bank of India deputy governor Shri SS Mundra says that the country is well placed to roll out a system that would let people keep their account number when they moved bank.

Such a service would need a shared payment system, regulated independently, where all account number and payment instructions are warehoused, as well as a unique customer ID system and a central payment system.

But India already has its Aadhaa ID programme and the National Payments Corporation of India (NPCI), giving it the basis from which account portability could be built in a short space of time, argues Mundra.

"Why can’t we be a global first in this? Imagine how this can empower a customer and give an entirely new dimension to the competition, ensuring best of the breed customer service and fair pricing," says the deputy governor.

However, the speech gives no indication that this is something that the RBI plans to enforce, merely calling on the industry to "commence a serious discussion".

Full account number portability has been on the agenda in the UK for several years. In 2013 the country introduced a system designed to make it easier and quicker for Brits to switch their current account but it has proved a flop, with fewer consumers transferring their business in 2015 compared to the previous year.

This has led politicians and regulators to call for full portability, with the FCA floating two potential models: building it within the existing market structure and then running the additional infrastructure centrally; or a new central utility model based on a shared platform.

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Comments: (4)

Balasubramaniam Gd

Balasubramaniam Gd SVP at DBS

This is a brilliant move and much needed from the customer experience perspective, but banks are not going to like it, they may however circumvent this with additional caveats on the fine print which will probably defeat the actual purpose.

A Finextra member 

Excellent!!! Best is to keep everyones Aadhar ID number as their bank account number. This would be easily adapatable and can make it uniform and also  allow banks to implement kontomatik technology where they can fetch customer banking information at ease before switching banks and then ascertain wether the switch is allowed or not. The Aadhar ID as a bank account number will bring everyone in the financial inclusion.

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

Between my family and company, I have over 10 mobile phone connections across 3 TELCOs, say A, B and C. Lately, I rarely visit their stores to pay bills - HDFC Bank's PayZapp Ends My Bill Payment Woes - but when I do visit them, I see customers of TELCO B and C wanting to switch to TELCO A, customers of TELCO A and C wanting to switch to TELCO B, and so on (Under Mobile Number Portability procedure, physical visit to the destination TELCO is mandatory). 

The point of this story is this: No single MNO does so much better or worse than any other MNO as to cause a net inflow / outflow of consumers to / from it. I suspect the same with banks.

Ergo, this program will be a monumental waste of bank / taxpayer / customer's money. But there are a lot of budgets, publicity and careers at stake, so I won't be surprised if this program does happen.

Saurabha Sahu

Saurabha Sahu Senior Solution Consultant at Wipro Limited

Brilliant Idea!! However same kind of initiative and good response is already seen through Mobile number Portability. Today Mobile Number is considered as a Unique Identification for recognize an individual’s Identity.  Mobile Telecom Industry has reached over 10 Crore of Indian Population. Banks can always take the leverage of Mobile Number as one of the criteria for recognizing the old Bank Account Number which is required for portability. ADAR number will really help to link the Bank Accounts, however to know the Adar Number, Mobile Number is used. So Mobile Number is always having a grater and better advantage for the Bank to start with Account Number Portability. 

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