PM Modi Launches Digital Banking Units To Amplify Financial Inclusion

Prime Minister Narendra Modi inaugurated 75 digital banking units (DBUs) across 75 districts in the country on Sunday (October 16) via video conferencing.

Speaking at the occasion, PM Modi said, “Digital Banking Units are another big step in that direction which is going on in the country to make the life of the common man of India easier.” 

The DBUs have been set up with participation from 11 public sector banks, 12 private banks and one small finance bank.

“People living in small towns and villages will find benefits like transferring money to availing loans,” PM Modi added.

The event was also attended by Union Finance Minister Nirmala Sitharaman. She said that DBUs will enable people without a computer or a smartphone to access digital banking. “For those who are not even tech-savvy, there is a mode where they can be facilitated to avail of these paperless services,” she added.

The plans for the digital banking units were announced at this year’s Union Budget speech by Sitharaman.

What Is A Digital Banking Unit?

A digital banking unit is a brick-and-mortar setup that will provide digital banking services to people who do not have access to a personal computer, laptop or smartphone.

The outlets will allow users to access services such as opening savings accounts, checking balances, printing passbooks, applying for loans, applying for credit/debit cards, opening fixed deposits and paying taxes and bills.

Highlighting the features of the digital banking unit, Sitharaman added, “Even cash deposit facilities or opening of a deposit of fixed deposit or recurring deposits, one can avail of all these services. The government’s credit link schemes through the Jan Samarth portal will also be available for ordinary users; MSME and retail loan users can benefit from it [as well].”

At the event, RBI governor Shaktikanta Das added that the digital banking units (DBU) would provide three primary financial services including savings, credit and insurance. On the credit delivery front, to start with, the DBUs will provide end-to-end digital processing of small ticket retail and MSME loans, starting from online applications to disbursals, Das added.

How Will A DBU Work?

According to the RBI governor, a digital banking unit will function in two modes, self-service and assisted mode. The self-service mode would be available on a round-the-clock basis.

“The banks are also free to engage the services of digital business facilitators and business correspondents to expand the footprint of the DBUs,” Das added.

On the other hand, the assisted mode would be available during a bank’s working hours. Bank staff will be available to help and guide users for banking transactions in assisted mode.

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