RBI guidelines for Digital Banking Units (DBUs)

To expand digital financial services and financial inclusion, the Reserve Bank of India (RBI) has permitted Scheduled Commercial Banks (SCBs) with past digital banking experience to open Digital Banking Units (DBUs) in Tier 1 to Tier 6 centres .

  • The Reserve Bank of India (RBI) on April 7, released guidelines for SCBs (other than Regional Rural Banks, Payment Banks and Local Area Banks) on the establishment of Digital Banking Units (DBUs).

Guidelines

DBUs of banks will be treated as Banking Outlets (BOs). Each DBU has to be housed distinctly, with the separate entry and exit provisions.

  • They will be separate from an existing BO with formats and designs most appropriate for digital banking users.
  • Each DBU is required to offer certain minimum digital banking products and services, per the guidelines. Such products should be on both liabilities and assets side of the balance sheet of the digital banking segment. Digitally value­ added services to conventional products would also qualify as such.
  • DBUs have to offer liability products and services such as account opening, digital kit for customers (mobile and Internet banking, debit and credit cards, and mass transit system cards) and digital kit for merchants (UPI QR code, BHIM Aadhaar, POS, among others) .
  • On the digital services front, DBUs have to allow cash withdrawal and cash deposit only through ATM and Cash Deposit Machines, respectively; passbook printing / statement generation; Internet banking kiosk; transfer of funds; and updation of KYC / other personal details.
  • Any product or service that can be provided digitally through Internet banking or mobile banking can be provided in the DBU.
  • Any product or service, which a bank is not permitted to offer as per the provisions of Banking Regulation Act 1949, as amended from time to time, cannot be offered by the DBU.

About Digital Banking Units (DBUs)

  • In the Union Budget FY23, Government had proposed for the setting up of 75 DBUs in 75 districts to commemorate 75 years of India’s independence.
  • A DBU is a specialised fixed point business unit/ hub housing certain minimum digital infrastructure for delivering digital banking products and services, as well as servicing existing financial products and services digitally, in both self service and assisted mode, all year round, according to the RBI.

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