Savings Bank Account Number Portability coming soon !
Implementing portability scheme is any form of service is the best way to ensure that the customer remains the king. While mobile number portability empowered telecom subscribers to ditch their erring operators; health insurance portability allowed customers to switch between, their life and non-life insurance, service providers.
More than serving its cause of allowing customers to switch between agencies, MNP has succeeded in creating policy awareness amongst them, and fear within service providers that they are not the dictators of the trade.
Furthermore, the government may now introduce portability in the banking space too. Yes, we may soon be allowed to move our savings bank accounts from one bank to another with the same number, which is likely to force banks (especially PSU banks) to improve their service levels.
Financial services secretary D K Mittal was quoted as, “We want to do it (savings account number portability). Right now there are some technical problems, we have identified them. We will overcome them soon.”
Moreover, this move comes at an opportune time when the RBI has deregulated the savings bank deposit rates. Post-deregulation, while smaller lenders led by Yes Bank has raised the savings deposit rates to 7%; leading banks such as HDFC Bank and SBI have shown muted response in terms of passing on hikes for their savings deposits.
Thus, once porting is allowed in the banking industry, the equation for larger banks could turn overhead – as the rate differential is too high to ignore between smaller and bigger banks, at this juncture. Take, for instance, for SBI – a 50 bps increase in the in the savings bank deposit rate will push up the state-owned bank’s costs by Rs.1500 crore.
The regulation is likely to be implemented once banks sort out their customer KYC norms, core banking solutions and other issues such as renumbering of savings accounts, most of which are preceded by branch codes of respective banks, and upgraded technology ready to adopt number portability.
This prospective norm will certainly save a lot of paper work involved in switching your bank account; and best of all you could retain your old account number without much hassles. Lastly, we need a centralised agency that would maintain all our KYC documents, so that we don’t need to comply with submissions with different banks repeatedly.