Savings account not mobile number: RBI

The finance ministry’s ambitious plan to implement portability in savings accounts has not found favour with the Reserve Bank of India (RBI).

The central bank has told the ministry there is no advantage to customers nore to banks from such a plan. “Savings bank accounts cannot be equated with a mobile number,” said a source in RBI. Adding: “The view has already been communicated to the government”.

Savings bank account number portability would allow a customer to switch to another bank while keeping the existing account number. Last year, the government had allowed mobile number portability.

According to central bankers, if a customer wants to shift to other banks, he or she can simply open an account. Having the same account number will have no specific significance. Neither would it give any benefit to the customer, unlike a telephone number. In addition, RBI says a bank account number is confidential and is not made public, unlike a cell phone number. “There are also security implications also,” added another source. The finance ministry recently announced that it was working to implement savings account portability, which would enable customers to change banks if they were not satisfied with the service and charges of a particular bank. The ministry also hinted at addressing some ‘technical’ issues on the same.

The banking regulator has made it clear that if banks want to implement portability they can do so, but savings account portability is not on RBI’s priority list. However, the ministry earlier said once the necessary regulations are in place, banks will have to follow it. To offer portability of a savings account, banks have to work on identification code, know your customer (KYC) norms and core banking solution (CBS) — which could be an uphill task.

The banking regulator also said a bank builds its resources on a savings account. A person’s savings account is customised according to the customer’s need. “A number can be transferred to another bank but the associated characteristics and charges cannot be transferred,” the source added.

In October, RBI deregulated the savings bank interest rate, one of the few, still administered to promote competition among banks and also to improve monetary transmission.