Bookmark Bookmark

RBI GUIDELINES ON DIGITAL BANKING UNITS

Context

The Reserve Bank of India (RBI) recently issued recommendations for the country's banks to establish digital banking units (DBUs). In the Union Budget 2022-23, an announcement was made regarding the establishment of 75 DBUs in 75 districts.

Key Points

  • A DBU is a dedicated business unit that holds the bare minimum of digital infrastructure to provide digital banking services and products. 
  • The DBU's goal is to increase financial inclusion and digital financial services.

DBU Policies and Procedures

  • According to the criteria, permission to open DBUs has been granted to schedule commercial banks (SCB) with prior digital banking expertise.
  • They can open DBUs in Tier 1 to Tier 6 centres without the Reserve Bank of India's clearance (RBI).
  • The DBUs that the SCBs will open will be treated as Banking Outlets.
  • Each DBU must be housed separately, with separate exit and entry provisions.
  • The recommendations indicate that the DBUs shall be separate from the existing Banking Outlets, with appropriate formats offered for digital banking customers.
  • The SCBs will also have the option of using an outsourced or in-sourced model for DBU operations.
  • The outsourced model must adhere to the outsourcing regulatory criteria.
  • The DBUs must be established as part of the SCB's digital banking strategy.
  • The administrative and operational structure of the DBUs must be consistent with the SCBs' Digital Banking Segment.
  • The banks must maintain the physical security of the DBU infrastructure and the cyber security of the DBUs.
  • Banks can use business correspondents to increase the DBU's virtual footprint.
  • There should be sufficient systems to address client complaints about the services offered by DBUs.

Director of Digital Banking Units

  • Each DBU must be led by a senior and experienced bank executive who serves as the DBU's Chief Operating Officer (COO).

Services that the Digital Banking Units will offer

  • Each DBU will offer specific digital banking services and products. 
  • The products must appear on both the assets and liabilities sides of the balance sheet of the digital banking sector.

You might be interested:

SPACEX LAUNCH OF VISITORS TO SPACE STATION

Context On April 8, 2022, SpaceX deployed three wealthy people in business and their astronaut escorts to the International Space Station. They will spend more than a week on the space station. Key Po ...

6 months ago

Daily News Digest:10 April 2022

DISTRICT GANGA COMMITTEE'S DIGITAL DASHBOARDGajendra Singh Shekhawat, Union Minister for Jal Shakti, unveiled the 'Digital Dashboard for District Ganga Committees (DGCs) Performance Monitoring System' ...

6 months ago

One Liners of the Day, 9 April 2022

National According to research published by the Council on Energy, Environment, and Water (CEEW), the intensity and frequency of forest fires have increased over the last two decades, as has the numb ...

6 months ago

One Liners of the Day, 8 April 2022

National The Indian government has granted in-principle approval for five new sites for future nuclear power project locations. The Ministry of Electronics and Information Technology has constituted ...

6 months ago

One Liners of the Day, 7 April 2022

National The Indian government has submitted the Indian Antarctic Bill-2022, around 40 years after the country joined the Antarctic Treaty for the first time. This bill was introduced to monitor and ...

6 months ago

One Liners of the Day, 6 April 2022

National Larsen and Toubro, Indian Oil Corp. Ltd, and ReNew Power have agreed to form a joint venture business to build green hydrogen projects across India. Dr. Jitendra Singh, Union Minister of Sta ...

6 months ago

Provide your feedback on this article: