NEW DELHI: Prime Minister Narendra Modi dedicated 75 digital banking units (DBU) to India, on 16 October, as part of the Union Budget 2022-2023 with the goal of making banking services available to even the most isolated rural areas of India.
With the rapid growth of digitalisation in India, DBUs will offer assistance day and night with self-service modes to a tech-illiterate.
Speaking further in detail, Krishnan Iyer, CEO & Co-founder, Finezza, told The Sunday Guardian, “Though assisted mode will be available during the working hours, the moot purpose of DBUs is to provide 24/7 banking through the self-service mode. DBUs add another channel for the customers to avail of banking services. The simplest idea behind increasing channels is to provide more options and lessen friction. Moreover, in semi-urban and rural areas, a DBU is a more convenient way of providing banking services vis-a-vis full branch expansion. Penetration of banking services has to happen which also provides growth opportunities to the banking sector. But, only such growth is sustainable which is profitable and efficient. DBUs can play a big role towards this as they can be easily set up and increase access to services for the customers and access to customers for the banks.”
A digital banking unit is a specialised fixed point business unit or hub that is equipped with the minimum of digital infrastructure for the delivery of digital banking products and services as well as the self-service digital maintenance of current financial products and services at any time.
With reference to the ease of facilities provided in the DBU, Nixon Joseph, the former president of SBI Foundation, told this paper, “DBUs offer facilities like account opening, mobile banking, internet banking, debit cards, credit cards, passbook printing, transfer of funds, MSME, other schematic loans and so on. Many facilities that are not present in phone banking are offered by DBUs, also the availability of assistance in the DBUs will help people who are not tech-savvy.”
According to the National Payments Corporation of India (NPCI), 6.28 billion UPI transactions amounting to Rs 10.62 trillion were made in India during July 2022. This indicates how individuals are growing more confident in online transactions. People have been accepting digital payments during and post-pandemic. The introduction of digital payments in the rural corners of the nation has added an advantage to banking facilities. While explaining the infrastructure of DBUs in India, VP Singh, faculty of GLIM added, “BHIM-UPI, IMPS, pre-paid payment instruments (PPI) and National Electronic Toll Collection (NETC) etc have been very well accepted by masses as well as the high-value transaction segment. Digital Banking Units have an equally robust infrastructure. Moreover, someone who can hack into these systems would prefer to target high-value transactions rather than the low-value transactions of the segment targeted by Digital Banking Units.”
Due to the transition to digital channels, banking fraud is experiencing a revolution. This has traditionally been the territory of petty criminals looking to make little gains According to Dr Vishal Sareen, Economics professor at LPU, “Digital banking fraud is now a major international industry in which sophisticated criminal groups use increasingly sophisticated tools – and frequently collude with corrupt bank staff – to steal large sums of money. As a result, the liabilities that banks must bear to cover the losses that their customers suffer as a result of fraud have increased.”
However, DBUs are digitally secured. “The threat posed by online scammers and malware, and man-in-the-middle kind of threats on mobile devices and computers can be completely avoided with DBUs whose users may not have access to expensive and secure phone devices (like an iPhone) and anti-malware protections on the computers,” Krishnan Iyer said.