75 digital banking units in 75 districts: what are DBUs? | Explain

New Delhi: Finance Minister Nirmala Sitharaman in the 2022 budget had announced the establishment of 75 digital banking units in 75 districts in FY23. On Tuesday, she made a similar statement again. According to a report by Indian Express, this is done to give a boost to financial inclusion in the country. In her budget speech, she said, “In recent years, innovations in digital banking, digital payments and fintech have been growing at a rapid pace in the country. The government is continuously encouraging these sectors to ensure that the benefits of digital banking reach every nook and cranny of the country in a consumer-friendly way.Read also – Why Punjab and Haryana are on the verge of an electricity crisis | EXPLAIN

She continued, “To advance this agenda, and to mark 75 years of our independence, it is proposed to establish 75 Digital Banking Units (DBUs) in 75 districts across the country by regular commercial banks.” Also Read – WazirX CEO Nischal Shetty, Co-Founder Siddharth Menon India Shift Base in Dubai

What are DBUs?

According to a latest report by the Reserve Bank of India, a Digital Banking Unit (DBU) is a business unit or hub with digital infrastructure that helps in delivering banking products and services, in digital form, on a self-service basis. . In simpler terms, all traditional banking work like depositing checks, payment slips, etc., will be done digitally in these units. Also read – EMI on the car, home loans will soon become more expensive. Details inside

It was announced in order to ensure that digital banking services reach every nook and cranny of the country and increase the speed of payments.

How will DBUs be beneficial?

  • Credit flow will improve in rural areas.
  • The poor will have easier access to money and loans.
  • Setting up these units will be less expensive than conventional brick and mortar units.
  • They will provide better technical support to customers.
  • Digital units will reduce labor requirements.
  • For programmed banks, they will ensure regular profits.
  • DBUs will help the government improve digital literacy.

Who will implement these DBUs?

Unless otherwise specified, commercial banks that offer digital banking services in India are allowed to set up DBUs in Tier 1-6 cities. They are not required to obtain permission from the Reserve Bank of India (RBI) in each case.

What services will the DBUs provide?

  • Assistance in opening savings accounts to receive money under government programs.
  • Assist customers with Fixed Deposits (FD) and Recurring Deposits (RD) as well as internet banking.
  • Provide digital kits to merchants as well as customers.
  • Provide UPI QR code and point-of-sale (PoS) mechanism.
  • Provision of debit and credit cards, enabling ATM transactions.
  • Assist clients with application for MSME loans.