What are Digital banking units?

October 17, 2022

75 digital banking units were inaugurated by Prime Minister Modi on October 16, 2022.

Key facts

In the Union Budget 2022-23, the Indian Government announced the setting up of 75 Digital Banking Units (DBUs) in 75 districts across India by the Scheduled Commercial Banks.
The launch commemorates the 75th anniversary of Indian independence.
A digital Banking Unit (DBU) is a specialized brick-and-mortar business unit/hub that is equipped with basic infrastructures like tablets and internet services for providing digital banking products and services.
It also provides digital services related to existing financial products and services in self-service mode at any time.
Services provided by these units include opening savings accounts under various schemes, balance-check, fund transfers, investment in fixed deposits, loan applications, digital kits for customers, stop-payment instructions for cheques issued, applications for credit and debit cards, tax and bill payments and nominations, mass transit systems cards, UPI QR codes, etc.
The DBUs will make banking products and services cost-effective and easily accessible for customers throughout the year.
They will make India financially inclusive by providing digital banking services in all states and union territories.
These units will promote digital financial literacy, with a special focus given to customer education on cyber security awareness and safeguards.
Real-time assistance and customer grievances arising from products and services provided by the DBUs will be addressed directly or via business facilities and correspondents.
The guidelines for setting up DBUs were announced by the Reserve Bank of India in April 2022.
Commercial banks having past experience in providing digital banking services are allowed to open DBUs in Tier 1 to 6 centers. They do not require RBI’s permission to set up these units.
Regional rural banks, payment banks, and local area banks cannot set up DBUs.
The DBU must provide certain minimum digital banking products and services.
These products and services must be on both liabilities and assets side of the digital banking segment’s balance sheet.