Govt to expand DBU mandate
2 min read . Updated: 01 Feb 2023, 09:02 AM IST
PremiumWhile DBUs are currently offering basic banking service both on asset (loan) and liability (deposits) side, under the new expanded role it would also migrate to more structured and custom made products, from standard offerings by use of its hybrid and high quality interactive capabilities.
New Delhi: In a major digitalization drive, the government plans to expand the mandate of digital banking units (DBUs) to provide a larger bouquet of financial products, including insurance policies and other financial inclusion products and schemes.
According to two persons privy to the development, the new expanded mandate for DBUs may be launched in the first set of 75 DBUs that are being set up across the country, including in semi-urban and rural areas.It would then be taken in every new DBU that is set up thereafter.
“The idea is to extend basic digital services for delivering a host of financial products through the infrastructure set up under DBUs. This will help DBUs to turn into major vehicles of financial inclusion bringing banking and financial services to the doorsteps of people in unbanked or areas with limited financial services," said one of the persons quoted above.
DBU is a specialized fixed point business unit housing 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.
It enables customers to have cost- effective and convenient access and enhanced digital experience of such products and services in an efficient, paperless, secured and connected environment with most services being available in self-service mode at any time, all year round.
While DBUs are currently offering basic banking service both on asset (loan) and liability (deposits) side, under the new expanded role it would also migrate to more structured and custom made products, from standard offerings by use of its hybrid and high quality interactive capabilities.
Also, these units would start catering to the Centre’s financial inclusion initiatives such as Pradhan Mantri Jan Dhan Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana, Atal Pension Yojana and PM SVANidhi.
The plan is also for these units to aid issue of Kisan Credit Card and cater to the needs of direct benefit transfer beneficiaries digitally.
Queries sent to the ministry of finance and the financial services secretary remained unanswered till press time.
The government is focusing on strengthening DBUs as these units optimally blend digital infrastructure with ‘human touch’, bringing more comfort to people in rural areas and unbanked centres to use this facility for their financial needs.
At present delivery of insurance products to the remotest corners of the country is posing a challenge for the Centre.
The DBUs are expected to aid in delivery of such services.
Besides, with human touch given to these centres, and banks deploying their experienced staff to man such units, it is expected that these centres would also educate customers about the need to participate in various financial products including savings and insurance.It is expected that government will also nudge private sector banks to create these DBUs is semi-urban areas to accelerate growth of digital financial eco system in the country.
