The long list of Aadhar uses has yet another application added to it’s list. It can now help you with bank account portability.
Bank account portability is when you switch from one bank to another bank. So far, while switching from one bank to another, there used to exist a lot of hassles for the customer to ensure the complete process is smooth. Often times, they used to either lose direct credits or missing out on payments made against standing instructions.
In order to remove this strain and make bank account portability easier, the RBI has recently announced that linking bank accounts to the Aadhar will facilitate bank account portability. Read further to know how Aadhar will facilitate bank account portability and the estimated time taken for this step to be implemented.
How Can Aadhar Help with Bank Account Portability?
The Deputy Governor of RBI, SS Mundra said on 14th December 2016,
“When there is realization among people and they start linking their bank accounts to Aadhaar this will become possible. This is the direction for the future,”.
The bank accounts, until now were considered to be the most rigid of all financial relationships in terms of making changes or changing over completely to another bank, owing to the standing instructions of bill payments, loan installments, regular credits of interest, dividend and salaries etc. all being processed automatically, once such instructions are give. So when one changed over to another account, these instructions and processes had to be done all over again, thus causing a lot of time being wasted from the customers perspective.
But now with the introduction of Aadhar based bank account portability, all the standing instructions with respect to both debit and credit will move along with the account number to the new bank. This will solve the problem of the customers who fear losing credits or missing out on payments due to standing instructions.
A bank account in today’s time has to be identified with multiple numbers such as the IFSC code and the bank account number. In future, it will not be necessary to know all the identifiers to send money to a bank account. This will be made possible with the Aadhar payments bridge system (APBS) developed by the Unique Identification Authority of India and National Payments Corporation of India. With the help of the ABPS, the transactions can be routed to an individual based solely on his Aadhar number if the bank details have been linked to the Aadhar.
It is indeed interesting to know that even today, the government makes the payment of subsidies and other benefits as per the direct benefit transfer (DBT) scheme without the account details of the beneficiary. The payment by the government is made using the APBS.
As per the central bank, the step to have portability is seen as a medium term objective and a few years will be taken to implement the move completely.
Thus, a huge step will be taken in the near future which will prove to be a boon for many people who are struggling with bank account portability. Aadhar is certainly a very important document as it serves multiple purposes, from providing proof of residence to providing a proof of identity, the Aadhar is a document that every Indian citizen must possess.
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