RBI asks banks to enable account number portability

Reserve Bank of India (RBI) wants banks to move towards account number portability, which would allow customers to choose between banks according to their convenience and also help banks improve customer service.

RBI deputy governor S S Mundra has asked banks to work towards account number portability, which will have far-reaching impact on competition in the banking sector, leading to improved customer service.

Speaking at the annual conference of banking ombudsmen in Mumbai last week, he said banks should look forward to providing more choices, including channels, to the new generation of customers who are more technology savvy.

''A scenario was thus emerging wherein customers would be able to silently walk out from one institution to another, in case of any dissatisfaction with the services,'' he said, adding, ''This would be further accentuated with the possibility of portability of accounts.''

In his keynote address, the deputy governor mentioned that the Banking Ombudsman Scheme had been amended to, inter alia, include deficiencies in mobile and electronic banking as well as mis-selling of third-party investment products by banks as eligible grounds for lodging complaint. In order to deepen and widen the reach of the BO Scheme, he mentioned that the RBI had opened five new BO offices and if required, opening of few more BO offices could be considered over time.

With regard to complaint management, he suggested that banks should seek to study the patterns and undertake root cause analysis of complaints, which would be possible by adopting end-to-end automation of the grievance redressal mechanism and deployment of latest analytical tools.

Mundra  also pointed to the rising trend of loss of cheques from drop boxes and the lack of interest shown by banks in redressing such complaints. In such cases, he said, the customer must be compensated immediately. The DG therefore urged the banks to explore the possibility of creating a common account and compensate the customers immediately from this pool, without waiting for recovery of the amount from insurance etc.

Stressing upon the importance of the Banking Correspondents (BCs), the DG exhorted banks to pay close attention to services rendered by BCs, especially in rural and semi-urban areas and take precautions to curb mis-selling of products and address the problem of illiterate customers getting duped by aggressive marketers of financial products.

Mundra also impressed upon the banks to move away from seeking 'negative confirmation' from customers in respect of legal agreements that often have several fine prints, and instead obtain 'positive confirmations' from the customers that they have read and understood the terms and conditions of the product / service.

He urged banks and the IBA to work towards evolving a common platform to provide a comparative and transparent view of various products and services to help the customer in selecting the option/s best suitable to them.