Bank Account Portability Scheme; Government to Ask UIDAI, NPCI For a Solution

Bank Account Portability Scheme; Government to Ask UIDAI, NPCI For a Solution

Bank account number portability can soon be a reality despite facing resistance from Indian Banks’ Association (IBA) and trade unions. This is because the government has asked banks to take the help of UIDAI and NPCI to solve technical and other glitches faced by banks in the implementation of inter-bank account portability. 

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Highlights 
  • Government pushes to implement bank account portability 
  • Goverment told banks to ask UIDAI and NPCI for a solution 
  • IBA and trade unions resist due to technical glitches 
The Unique Identification Authority of India (UIDAI) issues a 12 digit Aadhaar number as unique identity to all residents of India. National Payments Corporation of India (NPCI) is an umbrella body for retail payments in India. It was set up by Reserve Bank of India (RBI) and IBA. 

Once the scheme gets implemented, you will be able to switch from one bank to another bank while retaining your old account number. But, the scheme has faced opposition by IBA and trade unions due to technical glitches as one of the main reasons. 

Sources close to the development informed Zee Business’s Alok Priyadarshi that the RBI in its recent meeting with the Finance Ministry informed, “The plan to implement the scheme of bank account portability may be delayed due to certain glitches in the process, like technology and the sheer number of bank accounts. Core Banking System, as well as bank frauds and the existing Non-Performing Assets (NPAs), are also one of the areas of problems.” 

RBI Deputy Governor SS Mundra suggested banks in 2017 to look into bank account number portability with an aim to improve customer service. 

According to the sources, the government wants to provide the facility to bank customers, whose bank accounts are linked with their Aadhaar numbers. Currently, there are around 80 crore bank accounts in the country. The number of bank accounts has risen sharply after Prime Minister announced Jan Dhan Yojana in 2015. 

Intra-bank portability was allowed by the RBI in 2012 so that customers can transfer their bank accounts from one branch to another without the need of undergoing again the full know-your-customer process. 

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