How Digital Banking Units will boost India's digital economy. Experts weigh in
PremiumDigital Banking Units (DBUs) will be a fixed business units operating under the retail banking division of the bank
The Reserve Bank of India (RBI) has issued guidelines for the establishment of Digital Banking Units (DBUs). To commemorate the 75 years of independence of the country, Finance Minister Nirmala Sitharaman had made announcements for setting up 75 DBUs in 75 districts in Budget 2022.
"The new guidelines will prompt the banks, including the traditional ones to adopt a Digital Strategy under direct review of the Board. The Digital Banking Licenses would be issued over the next 12 to 24 months. Hence banks need to be compliant and create a separate reporting to meet the RBI targets so that Digital Businesses cross the bar of, say, “50%", said Nitin Misra, Co-founder, indiagold
He added that this will also prompt the launch of new products or services or transition of the existing ones to become holistically digitized, particularly for the Retail and SME segments, fostering innovation.
Digital Banking Unit (DBU)
DBU is a specialised fixed point business unit housing a certain minimum digital infrastructure for delivering digital banking products and services. It will be a fixed business unit operating under the retail banking division of the bank and will deliver new digital products and services and service existing financial products digitally, in a cost-effective, efficient and secure manner with 24X7 availability.
Mehul Mistry, Global Head-Strategy, Digital Financial Services & Partnerships, Wibmo, A PayU Company said:"In addition to onboarding customers in a fully digital environment and offering digital products and services, DBUs will also be responsible to offer hands-on customer education on Safe digital banking products and practices for inducing customers to self-service digital banking."
Products and Services that can be offered by DBUs
Liability Products and Services like deposits(Savings, Current, Time and Recurring Deposits), Asset Products and Services (Retail and MSME Loans), Digital Transaction services like Transfers, deposits, withdrawal, KYC, including request services like Cheque book etc, said Mehul Mistry.
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As per the guidelines released by RBI, DBUs of the banks will be treated as banking outlets.
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