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Digital banking units (DBUs) will soon be launched in 75 districts across the country with at least 10 products and services, which will be scaled up to 30 in due course, sources told FE. These would cover both the asset (loan) and liabilities (deposits) sides.
In a meeting last week, the department of financial services reviewed the progress of the DBUs, aimed at expanding digital banking in mainly rural areas, to ensure customer satisfaction gets top priority at such units, one of the sources said.
The initial set of services at the DBUs could cover facilities like savings, current, recurring deposits and fixed deposits, withdrawal, passbook printing. Customers will have digital kit for mobile and internet banking, debit card, credit card, mass transit system cards, UPI QR code, BHIM Aadhaar and point of sale.
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“All the necessary preparations are done. DBUs will have a bouquet of services to choose from but they will have to mandatorily offer at least 10 of these services initially. This number will be raised to 30 once the DBU eco-system picks up pace,” said another source.
Unlike the usual bank branches, the DBUs will be “paperless”. Also, they won’t be counted as branches of a bank but its distinct digital entities, he added. “A typical branch conducts many traditional functions, which also involve paperwork. But here (DBUs), there will be machines and some assistants to carry out various functions digitally,” he added.
Presenting the Budget for FY23, finance minister Nirmala Sitharaman had announced the setting up of 75 DBUs in 75 districts to commemorate the 75 years of India’s independence. While the drive is limited to less than a tenth districts in the country, the number of such entities could be raised in future, said a senior banker. At present, they are being set up only at the district headquarters.
The DBUs will have assistants to help customers wishing to apply for loans (retail, MSME, etc) digitally, unlike in most normal branches.
No physical cash will be accepted for deposits at the DBUs. Withdrawals and deposits through ATM and cash deposit machines would be allowed. Facilities like internet banking kiosk, national electronic funds transfer (NEFT), immediate payment service (IMPS), KYC (know-your-customer) updates, mechanism to lodge grievances and account-opening kiosks would also be in place.
These DBUs, especially of the state-run banks, will also ensure digital onboarding of customers for various government schemes, including the Atal Pension Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana.
All state-run banks, 10 private-sector banks and one small finance bank have started work to operationalise the DBUs. State Bank of India will set up the maximum number of DBUs (12), followed by Punjab National Bank and Union Bank of India (8 each), Bank of Baroda (7), Canara Bank (6) and Indian Bank (3). Among private lenders, ICICI Bank and Axis Bank will establish 3 DBUs each and HDFC Bank 2 DBUs, according to the Indian Banks’ Association (IBA).
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