Banks to operationalize digital banking units in 75 districts by July: IBA

All public sector banks, ten private banks and one small finance bank have kicked off the works to operationalize 75 digital banking units (DBUs) in 75 districts by July 2022, the Association of Indian Banks said.

Union Finance Minister Nirmala Sitharaman had announced in the Union Budget 2022-23 that 75 DBUs in 75 districts would be established to commemorate 75 years of independence so that the benefits of digital banking reach every nook and cranny of the country.

The progress of the pilot implementation of the project is regularly monitored by a committee of the Reserve Bank of India (RBI), the Association said in a statement.

In its guidelines for the establishment of DBUs, the RBI has allowed Scheduled Commercial Banks (SCBs) with previous experience in digital banking to open DBUs at Tier 1-6 centres.

Minimal digital infrastructure

A DBU is a specialized fixed-point business unit/hub housing a minimum digital infrastructure to deliver digital banking products and services as well as to digitally service existing financial products and services, in self-service and attended mode at all times, year-round, according to the RBI.

The banking regulator stressed that the creation of DBUs should be part of the bank’s digital banking strategy. Bank DBUs will be treated as bank outlets (BO).

Each DBU should be hosted separately, with separate input and output arrangements. They will be separate from an existing soundtrack with formats and designs more appropriate for digital banking users.

Additionally, banks have the option to engage digital business facilitators/trade correspondents, taking into account relevant regulations to expand the virtual footprint of DBUs.

Published on

May 05, 2022