News Highlight
Prime Minister dedicated 75 Digital Banking Units to the nation, taking forward a promise that Finance Minister had made during the 2022-23 Union Budget.
The project is in line with the Centre’s ambitious goal of financial inclusion.
Background:
- In the Budget for 2022-23, the Finance Minister strongly pitched the idea of DBUs in an era when digital banking, digital payments and fintech innovations have grown at a rapid pace in the country.
- To mark 75 years of India’s independence, she proposed to set up 75 Digital Banking Units (DBUs) in 75 districts of the country by Scheduled Commercial Banks.
What are Digital Banking Units (DBUs)?
- Digital Banking Units (DBUs), in layman’s terms, are specialised branches for delivering digital banking products and services.
- DBUs will be paperless, and they will also act as digital financial literacy centres.
- They are specialised fixed-point business units/hubs housing minimum digital infrastructure for delivering digital banking products and services.
- This will be delivered in both self-service and assisted modes.
- Digital Banking Units provide a variety of digital banking facilities to people such as
- opening a savings account,
- account balance check,
- printing passbook,
- funds transfer,
- fixed deposit investments,
- loan applications, applications for credit or debit cards,
- and bill and tax payments, among others.
Objective of Digital Banking Units
- To improve the availability of digital infrastructure for banking services.
- This will also help accelerate and widen the reach of digital banking services.
- This setting up of DBUs is another important step in the country’s banking industry journey, from being physical to phygital to digital-first to digital only.
- In fact, NITI Aayog has pitched for “digital only” banks to be set up in the country.
Benefits
- DBUs will promote financial inclusion and financial literacy among citizens.
- They will provide all banking facilities paperless and hassle-free.
- DBUs will enable customers to have cost-effective, convenient access and enhanced digital experience of banking products and services all around the year.
Other functions
- Other services include applications for identified retail, MSME or structured loans and onboarding of customers.
- This includes end-to-end digital processing of such loans, from online application to disbursal and approved government-sponsored schemes under the national portal.
Who can set up DBUs in India?
- All domestic scheduled commercial banks other than regional rural banks, payments banks, and local area banks can set up DBUs.
- In the first round of 75 DBUs, as many as 11 public sector banks, 12 private sector banks, and one small finance bank participated in the programme.
Pic Courtesy: freepik
Content Source: The Hindu