The financial and banking sector in India is seeing a lot of reforms and changes to take the banking system up to the global standards, and in many cases surpass them. As a part of these changes, the banking sector in India is ready to move towards the account number portability, as per the deputy governor of Reserve Bank of India, S.S. Mundra.
Comparing the telecom sector, Mundra claimed that consumers should be capable of moving effortlessly between the banks without changing their account numbers, in case they be are not satisfied with their bank. This will not only benefit the customers in making the best of the offerings by various banks but also increase the competition among the banks to improve their services.
After effective roll-out of the mobile number portability (MNP) and health insurance portability, the Indian Government is preparing for implementing savings account number portability and providing customers flexibility of changing their bank accounts while retaining their account numbers.
Is it doable?
According to MD Mallya, managing director and chairman, Bank of Baroda, Account number portability is doable and is will benefit the consumers as well as the businesses. However, there is an urgent need for improving the technological setup, particularly for the banking sector. While the larger banks are equipped with the required technology, the smaller and regional banks lack the same badly. First and most important issue to handle will be to bring all the banks on to same level of technology adoption at least for managing accounts.
This idea has received mixed reactions across the industry. Though, experts say unless there is an appropriate regulation in place along with upgraded technology for overseeing the scheme, it is not viable.