Account transfer within bank made easier by RBI

          Bank customers who change locations or jobs will find it easier to shift their bank account to the new location quite easily now. The Reserve Bank of India (RBI) has made it mandatory for banks to allow transfer of accounts from one branch to another without insisting on opening a new fresh account or making the customer undergo the full know your customer process again.

          Earlier, since the account holder information was maintained with local branches, banks used to insists that customers go through the account opening procedure all over again when they shifted 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 account from one branch to another branch of the same bank. Such insistence on opening of fresh accounts 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 on Core Banking Solution (CBS), records of a particular customer can be accessed by any branch of the bank.

          An official with a new generation private bank said, “We provide ‘at par’ cheque books to our account holders, which means that the cheques will be treated as local cheques no matter which part of the country they are deposited in. So, it really doesn’t matter for the customer if the ‘home branch’ in a different city.”

          With all banks having put in place a core banking solution through which all account holder information is maintained in a centralized database accessible across branches, ATMs and Internet, the home branch concept has lost its relevance. But, some private banks charge high fees for services accessed outside the home branch. Also some lenders insist that changes on account services or document submission has to be done at the home branch only.

          In its Monetary Policy on April 17, RBI had asked banks to have a central customer ID to facilitate portability of accounts and ensure that all customer information is centralized. The central bank had indicated that some work was underway to have a common ID across the banking system. Some banks are seeing this as a precursor to having a central identity.

          “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 account. 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.