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31 May 2017

RBI wants to introduce bank account number portability

Mobile number portability has surely made our lives easier. But can the same apply to bank account numbers?

RBI Deputy Governor SS Mundra said it could soon be possible for people to shift their account from one bank to another while retaining their account numbers.

Mundra said the government's decision to link Aadhaar cards to bank accounts has made this technologically viable.

In context

Will bank account number portability soon become reality?

Analysis: Why bank account number portability is a good thing

The move could help unhappy bank customers save the trouble of going through the process of opening a new bank account while switching banks. This could also help customers do away with several accounts. Banking services could improve as portability would enhance competition.

Banks will need more technology and data integration

Data integration

Banks will need more technology and data integration

For the measure to go forward, banks would have to address issues related to technology and data-integration.

"Banks will have to restructure their account numbering systems. Many of them have different methods and streamlining these will take time," said Bankbazaar CEO Adhil Shetty.

"This will also involve changes in their software integration systems," he added.

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Banks need to adopt uniform KYC procedures

Currently, there is no uniformity in the 'Know Your Customer' (KYC) or due diligence procedures adopted by banks.

Experts believe there's a good chance that some customers may want to switch banks to avoid getting caught under the Prevention of Money Laundering Act.

Hence, a common KYC procedure is needed to differentiate between genuine customers and fraudsters.

Bank account number portability active in Europe, Australia

Banks in Europe and Australia offer bank account number portability facilities in varying forms, according to a report Infosys Technologies' banking solutions product Finacle.

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