Page 25 - Banking Finance November 2022

ARTICLE

connectivity penetration rates in Asia compared to Japan, Everyone uses modern mobile devices called smartphones,
Taiwan, Korea, and Singapore. Many in smaller cities and which can be easily used to access many digital banking
towns still use a dial-up connection. Slow connectivity speed services.The banking sector has also become more
discourages users to use digital banking. competitive with the arrival of digitization and the digital
India program for guaranteeing better customer service,
Digital banking makes it possible for banks and their customers thereby accomplishing the goal of a cashless economy.
to execute their business from anywhere in the world. But it Digitization in banking has started shifting the paradigm of
is difficult for regulatory authorities to enforce finance laws. cash and paper-based banking to cashless and paperless
Additionally, every nation has different regulations. Therefore, banking.
it is difficult to impose the same rules and regulations in every
country.Customers using digital banking services might For DBUs to find acceptance and win the confidence of
become irritated by frequent needless emails and updates. customers, banks must promise that the local ability is
Customers might get overly marketed and become annoyed coached and permitted to man these outlets, and recurrent
by those types of notifications. transfers of staff at these outlets must be avoided. Secondly,
while internet penetration has amplified, the quality of the
On the whole, it is good that the idea of DBUs, proposed in internet continues to be a problem in tier-2 and below
this year's Union Budget, is becoming a reality. The launching regions. For the effectual closure of a transaction, this
of DBUs is anticipated to give a booster dose to the outreach problem should be solved. In addition, the government and
of banking services, taking them beyond metros and large the banks including the RBI should attempt sincerely to
cities, to regions where financial inclusion, access to capital, solve all obstaclesinherent in the digital banking system
and formalization of credit remain a challenge. should be erased.

Today digital banking has taken a new form in the world of Definitely, the 75 DBU touchpoints will offer sufficient
technology. The banking industry is reshaping itself and learnings which can be used to improve this concept in the
progressing to a technological approach from the traditional future.Still, only time will tell 'will the DBUs differentiate
approach. Digital inventions are crafting a new picture of themselves from other sets of digital lenders on matters of
banking services. Due to the adoption of digitization, the governance and ethics?' For now, the new kid on the digital
banking sector in India is facing some remarkable changes as lending block will be keenly watched for its performance and
well as obstacles. As we are living in the digital era, it is not adherence to compliance norms, and data privacy, among
possible to avoid the growth and services of digital banking. others.

RBI cancels licence of Pune-based The Seva Vikas Co-op Bank

The Reserve Bank of India announced on Monday that it has revoked the licence of Pune-based The Seva Vikas Co-
operative Bank Ltd because the lender lacks adequate capital and earning prospects. The bank will no longer con-
duct banking operations as of the close of business on October 10, according to an RBI statement.
According to the bank's data, approximately 99 percent of depositors are entitled to receive the full sum of their
deposit accounts from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
DICGC had paid Rs 152.36 crore of the total deposit insurance as of September 14.
"The bank does not have adequate capital and earning prospects," the RBI said.

It also stated that the bank's current financial situation would prevent it from paying its current depositors in full.
The Seva Vikas Co-operative Bank is prohibited from conducting banking business, which includes, among other things,
accepting deposits and repaying deposits, with immediate impact, according to the RBI.
The Maharashtra Commissioner for Cooperation and Registrar of Cooperative Societies has also been asked to issue
a decision to wind the bank and assign a liquidator.

BANKING FINANCE | NOVEMBER | 2022 | 25