Account Portability: RBI’s PaSS Idea Under Payments Vision 2028
Why in the news
The Reserve Bank of India floated a plan that would let people move to another bank without losing their account number, much as a mobile number can be kept when changing operator.
Key facts
- Proposal: account portability, i.e. a new bank, same account number.
- Framework: Payments Switching Service (PaSS), part of Payments Vision 2028.
- Current problem: switching demands manual changes to salary credits, EMI mandates and SIPs, so many people stay with weak-service banks (customer inertia).
- Mechanism: a central layer maps the account number to the chosen bank and routes incoming and outgoing money correctly.
Who gains and who must adapt
| Group | Likely effect |
|---|---|
| Customers | Chase a higher savings rate (the example given was 0.5% more), escape poor apps or service, and reach lower-fee banks. |
| Banks (competition) | Cannot rely on lazy deposits; must fight to retain every customer. |
| Banks (technology) | Pushed to improve digital services to limit churn. |
| Banks (operations) | Must integrate closely with PaSS so mandates such as EMIs do not fail during a switch. |
Background concepts
- Account portability: comparable to Mobile Number Portability (MNP).
- Standing instructions and mandates: automated orders to pay a fixed sum at intervals, such as a subscription, home loan EMI or mutual fund SIP.
- Friction in retail banking: paperwork, branch visits and HR updates that discourage closing old accounts.
Exam angle
- Document in focus: Payments Vision 2028; framework: PaSS.
- Analogy to remember: MNP for phone numbers, portability for bank accounts.
- Core benefit: more competition and better service quality in retail banking.