Digital banking units will debut with at least 10 services

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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 expanded to 30 in due course, sources told FE. These would cover both assets (loans) and liabilities (deposits).

At a meeting last week, the Financial Services Department reviewed the progress of DBUs, aimed at extending digital banking services to predominantly rural areas, to ensure customer satisfaction is the top priority in these areas. units, one of the sources said.

The initial service package of DBUs could cover facilities such as savings, current and recurring deposits and fixed deposits, withdrawals, passbook printing. Customers will have a digital kit for mobile and internet banking, debit card, credit card, transit system cards, UPI QR code, BHIM Aadhaar and point of sale.

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“All the necessary preparations have been made. The DBUs will have the choice between a bouquet of services but they will have to offer at least 10 of these services initially. This number will be increased to 30 once the DBU ecosystem picks up speed,” another source said.

Unlike the usual bank branches, the DBUs will be “dematerialized”. Moreover, they will not be counted as branches of a bank but as its separate digital entities, he added. “A typical branch performs many traditional functions, which also involve paperwork. But here (the DBUs) there will be machines and some assistants to perform various functions digitally,” he added.

Presenting the budget for FY23, Finance Minister Nirmala Sitharaman had announced the establishment of 75 DBUs in 75 districts to commemorate 75 years of Indian independence. While the campaign is limited to less than a tenth of the country’s districts, the number of such entities could be increased in the future, a senior banker said. At present, they are only implemented at district headquarters.

DBUs will have assistants to help clients wishing to apply for loans (retail, MSMEs, etc.) digitally, unlike most normal branches.

No cash will be accepted for deposits in DBUs. Withdrawals and deposits through ATMs and cash machines would be allowed. Facilities such as Internet Banking Kiosk, National Electronic Funds Transfer (NEFT), Immediate Payments Service (IMPS), KYC (Know Your Customer) updates, Complaints Mechanism and Payment Kiosks account opening would also be in place.

These DBUs, especially public banks, will also provide digital onboarding of customers for various government schemes, including Atal Pension Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana.

All public banks, 10 private sector banks and a small financial bank have started implementing 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 create 3 DBUs each and HDFC Bank 2 DBUs, according to the Association of Indian Banks (IBA).

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