PM Modi Will Launch 75 Digital Banks Across 75 Districts On August 15th: 100% Paper-Less, And 100% Digital!

In a move to promote Digital India, Prime Minister Narendra Modi will reportedly inaugurate 75 digital banking units (DBUs) in 75 districts.

The inauguration is to be conducted on August 15, on the occasion of India’s 75th Independence day. 

Read on to find out all the details about these digital banks!

75 Digital Banking Units In 75 Cities

As per reports, all these units will be completely paperless and will be used as digital financial literacy centres. 

75 districts and banks have also been finalized by the Centre. In fact, they have also been asked to set up infrastructure and start training manpower for these DBUs. 

These districts include Leh, Srinagar, Lakshadweep, Aizawl, Kota, Nainital, and Lucknow. The financial institutions that have been selected have already begun working towards getting these units up and running by July 2022. 

Guidelines have also been released by the Reserve Bank of India to set up DBUs. This was further cemented by an announcement in the Budget for setting up 75 DBUs. 

What is a DBU? RBI Issues Guidelines

Introduced with a prime objective of expansion of digital financial services and financial inclusion, a Digital Banking Unit (DBU) is a specialised fixed point business unit / hub housing certain minimum digital infrastructure for delivering digital banking products & services.

The RBI said that each DBU will be headed by a sufficiently senior and experienced executive of the bank, preferably Scale III or above for PSBs or equivalent grades for other banks who can be designated as the Chief Operating Officer (COO) of the DBU in order to accelerate digital banking initiatives.

As per the guidelines, scheduled commercial banks with past digital banking experience are permitted to open DBUs in Tier 1 to Tier 6 centres without having the need to take permission from Reserve Bank of India in each case.

The RBI said that the DBUs of the banks will be treated as Banking Outlets and that each one needs to be housed distinctly with the separate entry and exit provisions. The central bank said that they will be separate from an existing Banking Outlet with formats and designs most appropriate for digital banking users.

Guidelines said that for the operations of the digital banking segment including DBUs, banks are free to adopt an in-sourced or out-sourced model. RBI said that the outsourced model should specifically comply with the relevant regulatory guidelines on outsourcing.