You may soon be able to switch your bank without having to change your account number, if you are savings bank account holder. The Finance Ministry is keen to usher in savings bank account number portability and has begun discussions on removing regulatory restrictions, a top Government official said.
“We want to do it (savings account number portability). Right now there are some technical problems, we have identified them. We will overcome them soon”, Mr D.K Mittal, Financial Services Secretary, told reporters here.
His remarks came after a meeting in the Finance Ministry attended, among others, by Finance Secretary, Mr R.S.Gujral, Economic Affairs Secretary, Mr R Gopalan, and Chief Economic Advisor in the Finance Ministry, Dr Kaushik Basu.
Introduction of savings account number portability is also expected to help customers change their banks without having to go through know your customer (KYC) norms again.
The Government has already, through sectoral regulators, allowed portability of mobile phone numbers and health insurance policies.
Mr Mittal said banks will have to work on identification codes, KYC norms and Core Banking Solutions for implementing savings bank account portability.
But, experts said savings bank account portability will force banks to offer similar interest rates on a savings account, which is not the case now. In addition, it will lead to a huge improvement in service delivery in PSU banks because they will be at risk of losing customers.
“Theoretically, it is a sound concept. To implement it is an Herculean task as it will mean renumbering of the existing savings bank accounts,” a senior SBI official said.
“We at SBI have about 130 million accounts. Assuming that it is about 25 per cent of total accounts, there would be about 500 million savings accounts in India that will have to be renumbered.”
Savings bank account portability will be a costly exercise and will be confusing for customers. Another point of confusion will be on KYC norms. When a customer is migrating from one bank to the other, the second bank may not want to rely on the KYC undertaken by the first bank, the SBI official said.
A Srinath, head of retail loans at Bank of Baroda, said, “The number portability is good, but, we need to have the necessary technology for it.”
Most banks are now on the CBS platform: The account numbers are 12, 13 or 14 numbers; the first few numbers are the branch code, the scheme code and the like. All these will have to be looked into before talking about account portability, Srinath said.