Indian Prime Minister Narendra Modi will reportedly open 75 digital banking units (DBUs) in 75 districts on August 15 to mark the 75th anniversary of India’s independence. The units will be completely paperless and serve as digital financial literacy centres. The Economic Times reported on May 6, citing officials, that the centre had finalised 75 districts and asked banks to build infrastructure and train manpower for these DBUs.

The government has identified Leh, Srinagar, Lakshadweep, Aizawl, Kota, Nainital and Lucknow. Selected financial institutions have already started working towards having the units operational by July 2022. The Reserve Bank of India (RBI) on April 8 issued guidelines for banks to set up DBUs. This comes after 75 DBUs were announced in the budget.

A DBU is a dedicated fixed point business unit/centre containing a specific minimum digital infrastructure to deliver digital banking products and services. The DBU’s goal is to expand digital financial services and financial inclusion.
According to the guidelines, regular commercial banks with experience in digital banking can open DBUs in tier 1 to 6 centres without obtaining an RBI license in each case.

DBUs of banks will be treated as bank branches, the RBI said, adding that each DBU needs to be housed individually with separate entry and exit rules. They will be separated from existing bank branches in a format and design best suited to digital banking users, the central bank said.