RBI mandates 'account portability' between bank branches

In a diktat aimed at helping customers who change their location for job or other reasons, the Reserve Bank of India today mandated all commercial banks to allow the transfer of an account from one branch to another without the customer having to open a fresh account and re-undergo the tedious know-your-customer (KYC) norms.

RBI has asked banks to allow 'intra-bank account portability' in cases where full KYC details of the account-holder have already been ascertained previously. The facility will enable the customers to shift their account to any of a bank's branches any number of times without having to change their account number.

So far, since the account holder's information is maintained with local branches, banks insist that customers go through the account opening procedure all over again when they shift to a different location.

"It has been brought to our notice that some banks are insisting on opening of fresh accounts by customers when customers approach them for transferring their accounts from one branch of the bank to another branch of the same bank. Such insistence on opening of fresh account or making the customer undergo full KYC process again causes inconvenience to them resulting in poor customer service," RBI said in a circular to all banks.

The circular added that given that most bank branches are now on ''core banking solution'' (ie computerised), records of a particular customer could be accessed by any branch of the bank.

In its monetary policy review of 17 April, RBI had asked banks to have a central customer ID base to facilitate portability of accounts and ensure that all customer information is centralised.

"Banks are advised that KYC once done by one branch of the bank should be valid for transfer of the account within the bank as long as full KYC has been done for the concerned account. In order to comply with KYC requirements of correct address of the person, fresh address proof may be obtained from him/her upon such transfer by the transferee branch," RBI said in its circular.