Switch banks without changing account number: RBI's planned payments push

Proposed framework aims to eliminate 'sticky' banking by allowing the seamless migration of salary, EMI, and SIP mandates to new providers.

The Reserve Bank of India (RBI) is preparing to introduce account portability, allowing customers to switch banks without changing their account numbers.

 

Outlined in the RBI’s Payments Vision 2028 document, the proposed Payments Switching Service (PaSS) framework aims to eliminate a major friction in retail banking: the difficulty of moving between institutions.

 

A typical savings account is linked to multiple financial flows:

 

• Salary credits
• Mutual fund investments
• Loan EMIs
• Utility bill payments
• Insurance premiums

 

Each of these is tied to the account through standing instructions or mandates. Changing banks means manually updating all these links, a process prone to delays, missed payments and penalties.

 

 

This inertia has made bank accounts “sticky”, even when service quality is poor or fees are high.

 

What RBI is proposing

 

The RBI now wants to address this structural issue through a centralised switching layer.

 

Under the proposed Payments Switching Service:

 

Customers will be able to view all incoming and outgoing payment mandates linked to their account in one place

 

They can migrate these mandates to a new bank account seamlessly

 

The switch can be full or partial, depending on user preference

 

The process will be executed with authorisation safeguards

 

According to the RBI, the objective is to “facilitate migration of payment instructions… thereby enabling customers to change their bank accounts with minimal friction.”

 

In effect, your bank account number could become portable, similar to mobile number portability in telecom.

 

What this means for customers

 

If rolled out effectively, the change will help bank customers in these ways.

 

Easier switching, more choice

 

Customers will no longer feel locked into a bank due to operational hassles. This could encourage them to move to banks offering:

• Better interest rates
• Lower charges
• Superior digital services
• Improved service quality

 

With switching barriers reduced, banks may face greater competitive pressure to retain customers.

 

Reduced risk of missed payments

 

Automated migration of mandates lowers the risk of:

• EMI defaults
• SIP disruptions
• Late payment penalties
• Better financial control

 

A unified dashboard of payment flows could give customers clearer visibility into their cash movements.

 

Not immediate, but directionally significant

 

It is important to note that the RBI has not yet announced a rollout timeline. The central bank has said it will “examine the feasibility” of PaSS, indicating that the proposal is still at a design stage.

 

Implementation will likely require:

 

• Integration across banks and payment systems
• Standardisation of mandate formats
• Strong data security and consent architecture
• Given the complexity, the rollout may be phased.
• Part of a broader payments overhaul

 

The account portability proposal sits within a wider push under Payments Vision 2028, which is anchored on user empowerment, trust and efficiency.

 

Key related initiatives include:

 

Cross-border payments reform

 

The RBI plans a comprehensive review of international payment systems to make them:

• Faster
• Cheaper
• More transparent

This aligns with global efforts led by the G20 to reduce friction in remittances and trade payments.

 

Greater control over digital payments

 

Customers may soon be able to enable or disable different payment modes (similar to card controls) across platforms, improving fraud prevention.

 

Shared liability in fraud cases

 

The RBI is exploring a framework where both the sender’s and receiver’s banks share responsibility in unauthorised transactions, potentially strengthening consumer protection.

 

Data-driven payments ecosystem

 

The central bank also aims to build a centralised payments data infrastructure, enabling better monitoring and innovation.

 

Bigger picture: from access to control

India already accounts for nearly half of global real-time digital payments, according to the RBI. The next phase of growth is less about access and more about control, flexibility and trust.

 

Bank account portability fits squarely into this shift.

 

By decoupling customers from operational constraints tied to a single bank, the RBI is effectively pushing the system towards:

• Platform-level interoperability
• Customer-centric design
• Competitive neutrality among banks