What is PaSS, RBI's bank account portability proposal, and how will it help customers?

Have you ever faced hassles in relation to your payment instructions, such as for EMIs, SIPs and other credits, after you have closed one of your bank accounts or two of the banking entities have merged? Now, the solution may soon be there as the Reserve Bank of India (RBI) as part of its ‘Payments Vision 2028’ is considering implementation of PaSS or Payments Switching Service.

Through the proposed centralised facility, customers will be able to migrate or switch their banks, while automatically switching their payment instructions, in a convenient and hassle-free manner.

RBI’s PaSS is part of the broader attempt at rendering payment infrastructure more interoperable and customer-friendly.

Other than bank account portability for different functions, the functionality will also facilitate banking customers in keeping a track of all payment flows linked to their bank accounts.

Also, they will be able to initiate either a full switch (in relation to all the active payment flows from the old bank account to new bank account) or a partial (only a sub-set of payments) switch,

So, the new service, if in place, will help in seamless ‘bank account portability’, doing away with the need to rewrite all the mandates in case of bank account change etc. This means your existing mandates in relation to mutual fund SIP, EMIs etc. will continue to run smoothly even if you have closed an account linked to them.

Banking customers through the novel facility will benefit as below:

1. Gain centralised control over their payment instructions
2. Also, they will see orderly and smooth transitions during systemic changes such as bank mergers etc.
3. Additionally with an easier switching facility across banks with no operational constraints, customers will have more options and hence can opt for banks offering better services, interest rates, and thus have an improved overall banking experience.
4. With automated migration of mandates, customers will face lower risk pertaining to SIP or EMI payment defaults, late payment charges etc., and hence better financial control.

Thus, the proposed PaSS facility will enhance customers’ banking experience by establishing bank account portability, while fostering healthy competition among financial institutions.

Other initiatives underPayments Vision 2028

In addition, the RBI also plans to introduce a way that will enable/ disable transactions for all digital payments. This will help control frauds in the digital payment ecosystem. Also, the limiting liability framework will be replaced with the shared responsibility framework as part of which, both the customer’s bank (issuer) and the beneficiary’s bank, will jointly bear the liability arising from unauthorised digital payment transactions.