New Delhi: Imagine being able to simply change the bank without changing your bank account number. This could become a reality if bank account portability gets adopted in India. Similar in concept to mobile number portability, the customer and not the bank will own the account number. Bank account portability is already being adopted by people in South Africa, Scandinavia and Europe.
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With numerous procedures required to close and open a new account, customers find it painful to switch bank accounts even if they are unhappy with their current bank’s service. “Along with technology it may happen. Today it may not be possible but tomorrow it will be. Within the bank today it is possible. You need to have only one ID and bank account can be taken anywhere. In fact bank account remains at one place only. You can get the service from anywhere,” says K.C. Chakrabarty, the chairman and managing director of Punjab National Bank.
The service will allow account holders who want to move their payment relationship from one bank to another, thus increasing customer mobility and lowering switching costs for their current accounts. This would help consumers who are mostly ignored after becoming a customer of the bank and miss out on privileges like lower interest rates on loans to new customers and sloppy service on phone banking. Though yet to be implemented in India, banks say they have taken steps in the right direction.
Says Gunit Chadha, Managing director and chief executive officer of Deutsche Bank, “I think customers have the choice right now. You can in-operate an account and move to another account. And you can have no frills account with transaction account portability. So in effect there is already bank account portability because a customer can make a choice.” Chadha though says bank account portability is not high on the priority list of many banks.
It is still a few years till bank account portability gets implemented in India. Not only will the regulator have to push for it but also all banks will have to be equally willing and technologically compatible for the seamless transfer of bank accounts.