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RBI deputy governor pushes for bank account portability via Aadhaar and UPI

The Reserve Bank of India’s deputy governor SS Mundra said that bank account portability — similar to mobile number portability in telecom operators — is now a possibility with technology advances in the Unified Payments Interface (UPI) and Aadhaar-bank account linkages.

With this, a customer can move their bank account number, complete with credit and debit history, to another bank, if they are not satisfied with their services.  “The prospect of an aggrieved customer silently moving her account to another bank in the near future has become very real,” Mundra said at a banking event organized by Banking Codes and Standard Board of India (BCSBI).

He also urged the Indian Banks Association (IBA), a representative body for banks, to take note of developments and come together for making bank account portability a reality, as indicated by this Moneycontrol report. The publication added that this could be done via the Aadhaar payments bridge system (APBS) protocol developed by the Unique Identification Authority of India (UIDAI) and National Payments Corporation of India (NPCI).

The APBS can route transactions to an individual based on his Aadhaar number if the bank details are linked to Aadhaar. The APBS is currently being used for direct benefit transfer of subsidies.

Note that the deputy governor had earlier made similar remarks in May 2016.

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“With the introduction of UPI, a customer can be identified with his unique “virtual address” mapped to his mobile phone linked to the bank account number. With this information available centrally at the NPCI, the portability of the account would merely need a change in linkage to an account in another bank at the backend,” Mundra had said.

NPCI’s comments

AP Hota, CEO of the NPCI, had a different view on bank account portability than the deputy governor. In an earlier interview with MediaNama, Hota said that the bank account portability via the UPI will not be in the conventional sense.

“In mobile portability, the number is retained and you were served by another operator and this will be almost like that.  In banking, the UPI addresses the need to provide portability. Account portability in the conventional sense, as in some countries, where a customer has to fill up a form saying he wants to transfer his account from Bank A to Bank B is, not there,” Hota said.

He added that the UPI makes a distinction between the relationship between an app provider and the relationship in the bank where the liability or deposit account in maintained. “I can continue to maintain my bank account in bank A and I can take the app of bank B and do all my transactions. So that way if bank A is not in a position to provide services I can get services from bank B. The need for account portability this way is diminished,” he said.

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