Page 24 - Banking Finance November 2022

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said that banks are free to involve business correspondents like PCOs (in the late nineties) were for long-distance calling
to inflate the footmark of DBUs and these physical units will or Internet cafes for browsing. This setting up of DBUs is
act as pivotal points for developing customer knowledge and one more significant move in the country's banking industry
education about using digital amenities for doing banking journey, from being physical to phygital to digital-first to
operations. digital only. NITI Aayog has pitched for "digital only" banks
to be set up in India.
Finance Minister Nirmala Sitharaman mentioned that these
75 DBUs would prepare people who do not have a personal Each DBU must provide some minimum digital banking
computer, laptop, or smartphone to be able to retrieve products and self-service execution facilities. However,
banking facilities and they can do it in a paperless mode. banks have the liberty to provide any other product or facility
She also mentioned the operations in DBU will be available on top of the minimum bouquet to cater to the precise
24x7 and promoting digital banking is crucial because it will requirements of the service zone. Any product or facility that
be cost-effective for consumers. She believes that the setting can be delivered digitally by way of internet banking or
up of these 75 DBUs by the Indian Banks Association will give mobile banking can be delivered in the DBU.
energy to digital banking in India and assist the economy
move to a cashless and comprehensive economy. DBUs can be established by all national scheduled
commercial banks excluding regional rural banks, payments
Not the new type of banks banks, and local area banks. Presently, 11 public sector
banks, 12 private sector banks, and one small finance bank
DBUs, in layperson's terms, are specialized branches for
participated in the programme. Currently, each of the 29
providing digital banking products and facilities. DBUs will be
States and eight Union Territories has got at least one DBU.
paperless, and they will also operate as digital financial literacy
Karnataka, Odisha, Rajasthan, Tamil Nadu and Uttar Pradesh
centers. They are specialized fixed-point business units or hubs
have got four each.
lodging minimum digital infrastructure for providing digital
banking products and facilities. These products and facilities
will be provided in both self-service and supported styles. It Will it change the landscape of banking?
has a self-service zone for customer transactions using Although digital banking has numerous advantages such as
Interactive ATMs, Cash deposit Machines, Interactive Digital flexibility, time-saving, environment-friendly, lower
Walls, Net banking Kiosks or Video calls, and Tab Banking. overheads, banking benefits, online bill payments, etc., it
The assisted zone in a DBU is manned by few bank staff. has few challenges. Technology challenges, IT practices,
certain cultural issues, security issues, industry lethargy, and
The key purpose of launching DBUs is to enhance the workplace constraints have affected the widespread
obtainability of digital infrastructure for banking amenities. acceptance of digital banking.
This will also aid accelerate and broaden the spread of
digital banking facilities. DBUs would be for digital banking Many people shrink back from digital banking due to security
reasons and many instances of cybercrimes being reported
daily.They feel anxious about online scams.Moreover,
navigating through the website of a bank may be difficult
for first-time users. Opening an account could also take time
as some sites ask for many personal details including photo
identification, which can inconvenience the potential
customer. Because of this inconvenience and complexity,
they may feel discouraged to use digital banking services.

Most customers like the personal touch and personalized
service provided by staff in bank branches. Many Indians are
also reluctant to contact call centers and bank customer
contact lines to tackle problems related to the online bank
account. Besides, India has one of the lowest broadband

24 | 2022 | NOVEMBER | BANKING FINANCE