Chanakya IAS Academy Blog

Notice

If RBI has its way, you can soon opt for bank account portability

If RBI has its way, you can soon opt for bank account portability

RBI deputy governor S S Mundra has batted for the introduction of bank account portability. The deputy governor stated that the concept which was considered abstract a couple of years back has now come become possible with technological advancements.

The governor also stated that as in the telecom sector, portability will allow a customer to transfer his account to another bank.

The governor also stated that RBI will soon come up with guidelines that will limit customer liability in case of a fraud.

Various technological advancements in recent times:

  • • Advancements in the field of payment systems such as UPI
  • • Massive enrolment under Aadhar (covered around 90 percent of the population) and its linkage to individual bank accounts

Challenges to bank account portability:

  • The banks need to make changes to their core banking solutions to implement portability
  • Another challenge will be use of multiple account number formats across banks. For example, while ICICI bank account number consist of 12 digits, HDFC account number consists of 14 digits
  • Uniformity of account number format is a must to achieve portability

Protecting customers by limiting their liability in case of a bank fraud:

  • RBI has issued a notification in August which stated that if a fraud is reported within four to seven working days, the liability of the customer will be capped at 5000 rupees
  • It has also asked banks to strengthen their IT systems and take steps that help safeguard customer liability

Complains made to the banking ombudsman:

  • The number of complaints made to the banking ombudsman exceeded one lakh last year
  • Percentage of complaints that relate to non-adherence to the banking codes and standards board of India code has significantly increased in recent times
  • This could be attributed to the lack of understanding of the code among frontline staff
  • Earlier the minimum standards for customer service has been codified
  • Bank statements at present are cryptic despite guidelines from the RBI that mandate recording of intelligible particulars
  • The quality of cheque leaves that enable printing of fake cheques is a matter of grave concern
Read 597 times Last modified on Thursday, 01 June 2017 11:49

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.