Reserve Bank of India (RBI) has 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).
A digital banking unit (DBU) should have interactive teller machines, video KYC, video conferencing and call facilities. Banking regulator Reserve Bank of India (RBI) released the DBU guidelines, according to which only scheduled commercial banks with past digital banking experience are permitted to open DBUs in Tier 1 to Tier 6 centres.
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Each DBU must offer certain minimum digital banking products and services – both on the asset (loan) liabilities (deposits) side. The new guidelines say that the DBUs are expected to migrate to more structured and custom-made products, from standard offerings by use of their hybrid and high-quality interactive capabilities.
Each digital banking unit should be housed distinctly with separate entry and exit provisions. They will be separate from an existing Banking Outlet with formats and designs most appropriate for digital banking users, said the newly released guidelines.
Finance Minister Nirmala Sitharaman had announced the launch of 75 digital banking units in 75 districts in her budget speech in February this year.
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.
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.
A DBU is a specialised fixed point business unit / hub housing certain minimum digital infrastructure for delivering digital banking products & services. The objective of a DBU is expansion of digital financial services and financial inclusion.
The DBUs of the banks will be treated as Banking Outlets, the RBI said, adding each DBU needs to 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, the central bank said.