Change your banks, not your account number, says RBI

After having the choice of porting your mobile number to another network, you would now be able to port your bank account number to another bank.

At an event organized by the Banking Codes and Standards Board of India, RBI deputy governor S S Mundra has said that technological innovation and linking bank accounts to Aadhaar has made it easier to port bank account numbers.

When put to use, this process won’t only save customers the trouble of going through the entire process of opening a new bank account while switching banks, and would also do away with the need to have multiple bank accounts.

Since the customers would find it easier to switch banks, there would be an increase in competition amongst banks, which could also lead to better services.

However, this is not going to be easy for banks given the number of loopholes about technology and data-integration front that need to be addressed before the process can be undertaken.

"Banks will have to restructure their account numbering systems. Many of them have different methods and streamlining these will take time. This will also involve changes in their software integration systems," Adhil Shetty, CEO of Bankbazaar told ET.

Also, there is a difference in the know your customer (KYC) procedures undertaken by different banks, which is why one bank might not accept the diligence done by another.

Also, people might switch banks too often to escape the net of the Prevention of Money Laundering Act, which also needs to be taken care of.