Soon you can switch banks without closing your account under RBI's new plan

Switching banks without the hassle of closing your existing account could soon become a reality, as the Reserve Bank of India (RBI) moves to introduce account portability under its Payments Vision 2028, according to a report by Times of India. 

RBI has placed consumer empowerment through portable bank accounts and cross-border efficiency at the centre of its Payments Vision 2028, signalling a new focus to improving user experience and reducing friction in money movement.

For most customers today, changing banks is not as simple as opening a new account. Salaries, EMIs, subscriptions and regular payments are often tied to one account, making it difficult to move away even if better options are available.

While customers can freely open accounts with any bank, savings accounts are considered ‘sticky’ because of multiple standing instructions to send and receive money into the specified account. RBI’s work around this stickiness is a Payments Switching Service where all standing instructions are centralised.

This centralised interface will allow customers to view and migrate all payment mandates, both incoming and outgoing reducing dependence on individual banks making accounts portable.

The central bank’s plan is to fix this through a system that allows users to shift these instructions easily, reducing their dependence on a single bank.

According to the report, RBI is also looking beyond domestic payments to improve how money moves across borders, where transactions are often slower and more expensive.

A key thrust is on making cross-border payments faster, cheaper and more accessible. The central bank plans a comprehensive review of the ecosystem to identify regulatory, operational and technological bottlenecks, aligning domestic systems with global standards shaped by the G20.

The broader push is aimed at making payments simpler and more flexible for users, while also opening up space for new players and innovation. India has already started linking its fast payment systems with other countries and is working towards wider acceptance of central bank digital currency (CBDC).