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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

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