RBI releases guidelines on establishment of Digital Banking Units

The Reserve Bank of India (RBI) on Thursday released the guidelines on establishment of Digital Banking Units (DBUs) after Finance Minister Nirmala Sitharaman, in her Budget speech for the financial year 2022-2023, had announced setting up of 75 DBUs in 75 districts to commemorate the 75 years of independence of our country (Azadi ka Amrit Mahotsav).

"In pursuance of the budget announcement a ‘Committee for establishment of Digital Banking Units (DBUs)’ was set-up by the Reserve Bank to outline a roadmap for establishment of DBUs," RBI said in a statement.

The Committee after necessary consultations and deliberations gave its recommendations on different aspects of DBU viz., the digital banking unit model, facilities to be offered in DBUs, monitoring of functioning of DBUs, cyber security and other IT-related aspects, role of DBU in the spread of digital banking awareness, etc.

Based on the recommendations of the Committee, the guidelines on ‘Establishment of Digital Banking Units’ have been finalised, the central bank added.

What is a Digital Banking Unit?

DBU is a specialised fixed point business unit / hub housing certain minimum digital infrastructure for delivering digital banking products and services, as well as servicing existing financial products and services digitally, in both self-service and assisted mode, to enable customers to have cost effective/ convenient access and better digital experience to/ of such products and services in an efficient, paperless, secured and connected environment with most services being available in self-service
mode at any time, all year round, stated RBI in its guidelines.

How will a commercial bank open its DBU?

RBI, in its detailed guidelines mentioned that all scheduled commercial banks (other than RRBs, PBs and LABs) with past digital banking experience are permitted to open DBUs in Tier 1 to Tier 6 centres, unless otherwise specifically restricted, without having the need to take permission from Reserve Bank of India in each case.

Each DBU shall be housed distinctly, with the separate entry and exit provisions. They will be separate from an existing banking outlet with formats and designs most appropriate for digital banking users.