Bank Account Portability scheme may be put on the back burner; government to ask UIDAI, NPCI for solution

Bank account portability allows the customer to shift form one bank to the other without having to give up his bank account number or without having to open a new account altogether.

Bank Account Portability scheme may be put on the back burner; government to ask UIDAI, NPCI for solution

New Delhi: The much talked about Bank Account Portability scheme may be put on the back burner as it is being opposed by Indian Banking Association and Trade Unions.

RBI in its recent meeting with the Finance Ministry has informed that the scheme may be delayed due to several technical reasons, sources close to the development informed Zee Business's Alok Priyadarshi.

"The plan to implement the Scheme of Bank Account Portability may be delayed due to certain glitches in the process like technology and the volume of bank accounts held by lakhs of people. Core Banking System, as well as bank frauds and the existing Non-Performing Assets (NPAs), are also one of the problem areas,” sources said.

Bank account portability allows the customer to shift form one bank to the other without having to give up his bank account number or without having to open a new account altogether.

Government reportedly wants to provide the facility to bank customers, whose bank accounts are linked with their Aadhaar numbers. Government will seek the suggestion of UIDAI and the NPCI so that it can arrive at a solution cumulatively.

In 2017, RBI Deputy Governor SS Mundra had asked banks to look into bank account number portability as it would improve customer service by enhancing competition between the banks.

Currently, there are around 80 crore bank accounts in the country, most of them were opened after the launch of Prime Minister's Jan Dhan Yojana in 2015.

It may be recalled that in 2012 the Reserve Bank of India had asked banks to allow intra-bank account portability in cases where full KYC (know your customer) details of the concerned account have been ascertained. The facility enables the customers to shift their account to any of the desired branch any number of times, without any change in the account number.

In order to comply with KYC requirements of correct address of the person, fresh address proof may be obtained upon such transfer by the transferee branch, it said.

RBI observed that most bank branches are now on Core Banking Service (CBS) and KYC records of a particular customer can be accessed by any branch of the bank.

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