India mulls bank account portability

Account holders in Indian banks will get account number portability similar to the mobile phone number portability adopted by leading Indian telecom companies.

A leading Indian banker revealed to 'Emirates24|7' that the Indian Banks Association and the Reserve Bank of India are seriously discussing the pros and cons of introducing bank account portability, a step that will help customers with bank accounts in one bank to use the same account number while moving to a new location.

Bank Account portability is already used in countries like Australia, South Africa and Europe. As there are many formalities currently existing to open or close a bank account, the new flexibility will be useful to the bank customers including NRI account holders.

P Nanda Kumaran, Managing Director, State Bank of Travancore said: “Within the State Bank of India group, we have already implemented the bank account portability system. A customer with an account with any of the branches of State Bank of India and its various subsidiaries and affiliates can easily use his existing bank account, while he moves to another city or state in India. As the floating population in India is high, and people employed in various projects like highways and other infrastructure projects keep moving from one city to another, they find it difficult to open new bank accounts in each location."

Nandakumar was in Dubai in connection with the State Bank of Travancore making more alliances with money exchange houses in Dubai. It is already managing City Exchange, a money remittance company to India.

Bank account portability will allow customers to use the same account number and bank with different banks.

The bank accounts will no longer be owned by the banks, but by the customers, who can switch the accounts to most friendly banks offering the best rates and services.

"Every time they move to a new location, banks will ask for introduction from a known customer and other proof of identity. A customer moving to a new city will naturally find it difficult to get a person to introduce in the new bank,” he said.

Mobile phone numbers in India are currently portable and the customer of any mobile phone company can use the same number with another operator. 

Bank account portability will be exactly similar and it will benefit the Non-Resident Indian customers also, who may change locations and habitats occasionally.

State Bank of India with more than 900 offices across 16 states, is part of the State Bank of India Group, the largest public sector bank in India. With about 8,500 of its own branch and another 5,100 branches of its Associate Banks (including the SBT) already networked, the State Bank of India group offers the largest banking network to the Indian customer.

"The Indian Banks Association is seriously discussing the bank account portability plan. Labour and employee movement rate in India is very high. Opening new bank accounts in each state or location is difficult as banks ask a lot of questions. With bank account portability, if you have a valid bank account, you can continue to bank with another bank in any other location in the country,” he added.

Indian Bank, another public sector bank,  has formally introduced account portability feature this week, allowing its customers across the country to retain the account number even if they change the branch. The facility would enable the customer to have the freedom of operating his or her account from any of the branches. Customers can shift their accounts from any branch to any other branch any number of times without altering the bank account. It is done with just a change in home branch code. A request letter to the home branch would do be enough. Home branch will also certify 'Know Your Customer' documents to control money laundering, while transferring the accounts. Other Indian banks will also follow suit, allowing more flexibility in opening and closing bank accounts.

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