After mobile telephones and medical insurance, will we have the option to move our savings bank accounts? There are green shoots of this, subject to banks falling in line.
It's an overdue move and can be implemented easily considering that most banks have managed to collaborate around automatic teller machines anyway. Technology is the easier part. Mindsets of banks are such that the Reserve Bank of India (RBI) will need to give them more than a gentle prod. No bank manager will let go of an account holder unless there are overriding disincentives to torpedo a portability application. There is social incentive in delivering portability to banking consumers. Standards of service in many banks (I do not think private and foreign banks are general exceptions to uneven quality) are really very poor. The consumer deserves to be able to penalise such banks. The disincentive normally is that the ‘other’ bank will demand the entire paperwork one more time. So, we often grumble and groan, but we usually stop short of severing our account with a lousy bank. The banker knows that! As we’ve often experienced, before the breaking point is arrived, the astute branch manager steps in at a crucial moment and her assuaging glass of water in the cabin (a cup of tea, if she's really kind!) usually forces us to change our mind. Portability, which is based on an integration of KYC (know your customer) data, can empower us to enjoy the tea, but press for a change anyway. Once integrated with ‘aadhar’ data, even less advantaged cutomers will have the option to revolt. The real advantage will kick in if performance metric of senior managers get linked to data on how many accounts moved on. I emphasise on senior folks, because the front-facing bank executive could be losing customers due to reasons beyond her control. For example, the excellent staff at Standard Chartered Bank I am familiar with have been saddled with a lousy software, which penalises account holders visiting in person! Mysteriously, the electronic hailer allows peons and drivers carrying memsaheb’s cheques get faster service! After protests from account holders, the poor tellers are back to identifying ‘known’ customers in person to break out of the queue. Clearly, someone higher up in the chain needs to be penalised here. Portability can help. Benchmarking the top guy is rationale behind performance management secretary Prajapati Trivedi trying to sign performance MoUs with secretaries to Government of India. There have been some counter comments. None appear to be unsurmountable. The principal opposition is that if portability is allowed, shady customers will get a chance to flee from bank to bank. This is trying to throw the baby with the bathwater. If KYC is indeed a unique ID, how can the crooks flee, leaving millions of honest customers paying the penalty? Rather than reinventing the wheel, extant experience with telecom and insurance portability can be useful. There are hard numbers to show that despite an aweful number of call drops, 98 per cent of us continue to suffer the same mobile provider. There’s a message hidden here for RBI. The telecom regulator has had to slap notices on some of the biggest operators for stalling portability requests.Some have erected unsurmountable walls, even informal non-compete arrangements, nixing our attempts to escape!
Rohit Bansal, CEO and Co-Founder, India Strategy Group, Hammurabi & Solomon Consulting LLP – The Pioneer
