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MUMBAI : The Reserve Bank of India (RBI) on Thursday allowed banks to open separate outlets to further financial inclusion and offer at least basic digital banking products and services in urban as well as rural areas.

Finance minister Nirmala Sitharaman had announced in her budget speech in February that to ensure that the benefits of digital banking reach every nook and corner of the country, 75 digital banking units (DBUs) will be set up in 75 districts.

Following the budget announcement, RBI formed a committee to outline a roadmap for establishment of DBUs. The committee has now made recommendations on different aspects of DBU, like the digital banking unit model, facilities to be offered, monitoring of functioning, cyber security and other IT related aspects, among others. The guidelines published on Thursday are based on the committee’s recommendations, RBI said.

A DBU is a specialized fixed point business unit housing certain minimum digital infrastructure to deliver digital banking products and services. The purpose of these digital banking units, RBI said, is to “optimally blend digital infrastructure with human touch". These are also intended to expand digital financial services and push financial inclusion and can be opened in tier 1 to tier 6 centres without prior RBI permission.

RBI has allowed public sector banks, private banks, foreign banks and small finance banks to operate these outlets, provided they are experienced in digital banking.

 “They (DBUs) will be separate from an existing banking outlet, with formats and designs most appropriate for digital banking users," RBI said.

Banks can choose suitable smart equipment at the front-end, including interactive teller machines, service terminals, teller and cash recyclers, interactive digital walls, document uploading and self -service card issuance devices. Back-end systems, including the core banking system, can be shared with the incumbent systems but with separation, the regulator said.

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

According to RBI, the operational governance and administrative structure of the DBUs will be aligned with that of the digital banking segment of the bank. However, in order to accelerate digital banking initiatives, each DBU will be headed by a “sufficiently senior" and experienced executive of the bank who can be designated as the chief operating officer.

The regulator has prescribed a list of products and services that have to be offered by these outlets. This includes opening various kinds of customer accounts, making applications for and onboarding of customer for retail and MSME loans with end-to-end digital processing, and services like cash withdrawal and cash deposit only through ATM and cash deposit machines. 

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