72% financial transactions of PSBs done via digital channels in FY21, says Centre

Nearly 72 per cent of financial transactions of Public Sector Banks (PSBs) are now done through digital channels, with customers active on digital channels having doubled from 3.4 crore in FY20 to 7.6 crore in FY21, the government has said.

Minister of state (MoS) for finance, Dr Bhagwat Kisanrao Karad, in a written reply to a question in Rajya Sabha, said the licence for banking is given by the Reserve Bank of India (RBI) and that it is not considering a separate licencing category for digital banks at present.

He said several steps have been taken to facilitate digital banking in the country, including the public sector banks (PSB) EASE reforms agenda;  the government's Jeevan Pramaan initiative for pensioners; contactless digital banking; and online bill discounting for MSMEs.

Under the EASE reforms agenda, the Centre has enabled enhanced access to mobile banking and internet banking through an increase in the number of services offered by PSBs; customer-friendly features; and regional languages on the customer interface.

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He said the end-to-end automated digital lending has been introduced in larger PSBs for unsecured personal loans (in five PSBs), loans to micro-enterprises and the renewals of loans to micro, small and medium enterprises (in three PSBs).

The minister said the Centre has also enabled digital retail loan requests via digital channels in all the seven large PSBs, with retail disbursements from loan requests initiated in the FY21 amounting to Rs 40,819 crore.
The PSBs have also enabled customer-need-driven, analytics-based credit offers, resulting in Rs 49,777 crore of fresh retail loan disbursements in FY21.

The Centre's Jeevan Pramaan initiative for pensioners has enabled pensioners the facility to update their annual life certificate online, he said.

He said the digital lending has been made contactless through PSBloansin59minutes.com, using triangulation of credit bureau, income-tax and goods and services tax (GST) data, to provide online in-principle approval for loans to micro, small and medium enterprises (MSMEs), home loans, personal loans and automobile loans.

Online bill discounting for MSMEs has also been enabled on a competitive basis through onboarding of PSBs onto the Trade Receivables Discounting System (TReDS) platform, the minister added.

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