The Reserve Bank of India (RBI) on Thursday has released guidelines for the banks to open digital banking units (DBUs), in a bid to enhance the spread of digital modes of banking in India’s interiors. The guidelines follow an announcement in the FY23 Budget for setting up of 75 DBUs in 75 districts, and lay down the basic minimum services that a DBU must provide.
gIn recent times, digital banking has emerged as the preferred banking service delivery channel along with ‘brick and mortar’ banking outlets. Reserve Bank has been taking progressive measures to improve availability of digital infrastructure for banking services. In furtherance of this objective and as a part of efforts to accelerate and widen the reach of digital banking services, the concept of ‘Digital Banking Units’ (DBUs) is being introduced by the Reserve Bank,” the central bank said in a notification.
The guidelines will apply only to scheduled commercial banks, and not to regional rural banks, payments banks and local area banks. Banks with past digital banking experience will be permitted to open DBUs in tier 1 to tier 6 centres, unless otherwise specifically restricted, without having the need to take permission from the RBI in each case.
Each DBU will be differentiated from other banking outlets by offering a design format best suited to needs of digital users. DBUs must offer certain minimum digital banking products and services. Such products should be on both liabilities and assets sides of the balance sheet of the digital banking segment, the RBI said.
On the liabilities side, banks must offer account opening services, digital kits for customers, including mobile banking, internet banking, debit cards, credit cards and mass transit system cards, as well as digital kits for merchants which could include UPI QR codes, Aadhaar and point of sale (POS)-based infrastructure.
In order to qualify as a DBU, a banking outlet must be able to make applications for and on-boarding of customers for retail, MSME or schematic loans and also administer government sponsored schemes which are covered under the National Portal. The DBU guidelines list seven specific services, including cash withdrawal and deposit through ATM and cash deposit machines, passbook printing services and internet banking kiosks.