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Bank Account Number Portability(BANP)
By:-AKASH GUPTA
AMAN SHARMA
Ankita Khanna
Sabrina Khankashi1
PRESENTATION
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What is BANP ? BANP stands for bank account number
portability.
Bank Account Portability Switching Banks
without changing account number . The idea is to save customers the
inconvenience of opening and closing bank
accounts or keeping multiple accounts if theyhave to shift to a new location or find theirbank's services unsatisfactory.
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How BANP works ?
The principle requirement of processingtransactions with bank account number portabilityis to be able to identify the account number and
the bank owning the account. This has made processing of payment
transactions easy.
There is no need to specify the beneficiary bankdetails every time a payment instruction isprocessed.
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Portability of services inBanks Portability of services in banking refers to the
extension of services to the customers of other banks.
Portability of services differs from bank account
number portability in that it involves extending a
service without owning an account.
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The stake holders involved in the
process BANP
Customer
Donor Bank
New Serving Bank Old Serving Bank
Clearing House
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Customer: The customer enjoying the banking relationship
Donor Bank: The first bank of the customer
New Serving Bank: The bank which will serve thecustomer consequent to the porting request
Old serving Bank:The customers bank prior to theporting request. For the first porting request, the donor andthe old serving bank are obviously the same.
Clearing House: The agency which owns the centraldatabase of ported bank account numbers, handles portingrequests from member banks and advises them of porting results.
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Bank Account Number Portability
(BANP) -
Need of the moment The goal should be to accord banking
customers the same privilege through bank
account number portability.
Service industry empowers customers to
change service providers without
inconvenience or loss
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In some countries like India, regulators are expectedto allow banks the freedom to determine the
interest rate on savings accounts.
Any measure to induce competition through
switching will not be effective unless it is hassle free
for customers.
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BANP process flow
The customer initiates the bank account number
portability service process with the new acquiring
bank.
The new acquiring bank, after scrutinizing theapplication and ..
ensuring KYC process( KNOW YOUR CUSTOMER)
compliance, initiates a porting request through itslocal database interface with the central database
of bank account numbers.
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The clearing agency, which owns the central
database of ported bank account numbers, sends a
porting out request to the old serving bank alongwith the customers details.
The old serving bank, after going through its closure
checklist (to check for pending instruments, dues
outstanding, if any, cancellation of ATM/ Debit card,
interest calculation till date etc.,) closes and remitsthe proceeds to the new acquiring bank with
porting confirmation to the clearing agency.
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Business Benefits
BANP is expected to stimulate competition amongbanks and offer a potential upside to those
maintaining consistency in customer service and
transparency in pricing.
It will provide an easy way to acquire profitable
customers and let goof unprofitable accounts.
It will give banks an opportunity to increase their
share in saturated markets. 11
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Challenges BANP will enhance competition among banks
to acquire customers and therefore increasethe cost of acquisition and service.
BANP could drive customers of banks withinadequate service and marketing to relativelystronger banks. Smaller and weaker banks willhave to focus on customer segmentation andproduct offerings to retain their customerbase.
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With deregulation of savings account interest
rates round the corner, banks will be forced to
hike yields and absorb the higher overall cost
of funds.
Banks will need to provide for heavy initial
investment and service costs to set up BANP IT
infrastructure. They will also need to trainstaff on the changed business processes.
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There will be concerns around IT security and
confidentiality of client information since the
central database of ported numbers will be
available to all member banks. Accordingly,appropriate access rights need to be defined.
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CONCLUSION BANP encourages banks to be more focused
on customer service and most importantly
transparent in pricing.
The customer should be free to choose a bank
for its product, notwithstanding a pre-existing
bundled product relationship with another
bank.
The customer can make a sound financial
judgment before switching a banking
relationship.
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THANK YOU
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