Skip to main content

What are Digital Banking Units (DBUs)?

Digital Banking Units (DBUs), the guidelines for which were issued by Reserve Bank of India (RBI) in April 2022, have been virtually launched in October 2022.

What is Digital Banking Unit (DBU)?

Digital Banking Unit (DBU) is – 

  • A specialised fixed point business unit / hub housing certain minimum digital infrastructure
  • For delivering digital banking products & services as well as servicing existing financial products & services digitally, in both self-service and assisted mode
  • To enable customers to have cost effective / convenient access and enhanced digital experience to / 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

What is the basis of the guidelines on DBUs?

In pursuance of the budget announcement a ‘Committee for establishment of Digital Banking Units (DBUs)’ was set-up by Reserve Bank of India (RBI) to outline a roadmap for establishment of DBUs. 

Based on the recommendations of the Committee, the guidelines on ‘Establishment of Digital Banking Units’ were finalised.

What is Digital Banking?

‘Digital Banking’ refers to –

  • Present and future electronic banking services provided by a licensed bank for the execution of financial, banking and other transactions and / or 
  • Orders / instruments through electronic devices / equipment over web sites (i.e online banking), mobile phones (i.e mobile banking) or other digital channels as determined by the bank
  • Which involve significant level of process automation and cross-institutional service capabilities running under enhanced technical architecture and differentiated business model / strategy

What is Digital Banking Segment?

‘Digital Banking Segment’, for the purpose of disclosure under Accounting Standard 17 (AS-17), is a sub-segment of the existing ‘Retail Banking’ Segment which will now be sub-divided in to –

  1. Digital Banking 
  2. Other Retail Banking

The business involving digital banking products acquired by DBUs or existing digital banking products would qualify to be clubbed under this segment.

What are digital banking products and services?

Digital banking products and services would generally mean those financial products / services whose designs and fulfilments have nearly end-to-end digital life cycle with the initial customer acquisition / product delivery necessarily taking place digitally through self-service or assisted self-service.

Which entities can set up DBUs?

Scheduled Commercial Banks (other than Regional Rural Banks, Payments Banks and Local Area Banks) with past digital banking experience are permitted to open DBUs in Tier 1 to Tier 6 centres, without requiring permission from RBI in each case.

DBUs of the banks are treated as Banking Outlets (BOs) as defined in circular on ‘Rationalisation of Branch Authorisation Policy - Revision of Guidelines’ dated May 18, 2017. For compliance with regulatory requirements on opening of BOs during a financial year, the DBUs are treated as opened in a centre from where the significant parts of its new business are proposed to be sourced, regardless of its physical location.

Who is the head of DBUs?

To accelerate digital banking initiatives, each DBU is headed by a sufficiently senior and experienced executive of the bank, preferably Scale III or above for PSBs or equivalent grades for other banks who can be designated as Chief Operating Officer (COO) of DBU.

What are the reporting timelines for DBUs?

Performance update with respect to DBU to be furnished to Department of Supervision (DoS), RBI on monthly basis and in a consolidated form in Annual Report of the bank.

Banks need to furnish information relating to opening, closure, merger or shifting of DBUs online through Central Information System for Banking Infrastructure (CISBI) portal to Department of Statistics and Information Management (DSIM), RBI.

How many DBUs have been set up?

75 DBUs have been set up in 75 districts in India to commemorate the 75 years of our independence (Azadi ka Amrit Mahotsav).

DBUs is a joint initiative of Government, RBI, Indian Banks Association and participating banks.

Which services will be offered by DBUs?

As mentioned by Shri Shaktikanta Das, Governor, RBI in his welcome remarks on the occasion of virtual launch of DBUs – 

  • The specific financial services to be provided by the DBUs include, among other things, savings, credit, investment and insurance. 
  • On the credit delivery front, to start with, the DBUs will provide end-to-end digital processing of small ticket retail and MSME loans, starting from online applications to disbursals. 
  • The DBUs will also provide services related to certain identified government sponsored schemes. 
  • The products and services in these Units will be provided in two modes, namely, self-service and assisted modes, with self-service mode being available on 24*7*365 basis. 
  • The banks are also free to engage the services of digital business facilitators and business correspondents to expand the footprint of the DBUs.


References

Reserve Bank of India. (2022, April 07). 'Establishment of Digital Banking Units (DBUs)'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12285&Mode=0

Reserve Bank of India. (2022, April 07). 'RBI releases Guidelines on Establishment of Digital Banking Units (DBUs)'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=53528

Reserve Bank of India. (2022, October 16). 'Virtual Launch of DBUs (Welcome Remarks by Shri Shaktikanta Das, Governor, Reserve Bank of India on October 16, 2022)'. Retrieved from https://www.rbi.org.in/Scripts/BS_SpeechesView.aspx?Id=1330


Follow at - Telegram   Instagram   LinkedIn   Twitter

Labels:

Comments

Post a Comment

Popular Posts

Regulatory Measures for the Foreign Exchange Market

Reserve Bank of India (RBI) has announced regulatory measures for the foreign exchange market. Cancellation and rebooking / rollovers of foreign exchange derivative contracts An Authorised Dealer shall not permit users to rebook any foreign exchange derivative contract involving the INR, whether deliverable or non-deliverable, which has been cancelled with any of the Authorised Dealers. An Authorised Dealer may, however, continue to permit users to rollover foreign exchange derivative contracts on maturity, subject to compliance with the extant directions. Threshold limit for taking positions without requirement to establish the existence of underlying Authorised Dealers were permitted to allow users to take positions upto USD 100 million equivalent of notional value (outstanding at any point of time), across all Authorised Dealers, for hedging contracted exposure without the requirement to establish the existence of underlying exposure.  Further, a user was allowed to take positio...
Post a Comment
Read more

Credit Facilities to Scheduled Castes (SCs) & Scheduled Tribes (STs)

Reserve Bank of India (RBI) has issued guidelines on credit facilities to Scheduled Castes (SCs) & Scheduled Tribes (STs). What are the guidelines on credit facilities to SCs & STs? District Level Consultative Committees formed under the Lead Bank Scheme should continue to be the principal mechanism of co-ordination between banks and development agencies.  National Scheduled Tribes Finance & Development Corporation and National Scheduled Castes Finance & Development Corporation have been set up under the administrative control of Ministry of Tribal Affairs and Ministry of Social Justice & Empowerment, respectively. Banks should advise their branches / controlling offices to render all the necessary institutional support to enable these institutions to achieve the desired objectives. Loans sanctioned to State Sponsored Organisations for Scheduled Castes / Scheduled Tribes for the specific purpose of purchase and supply of inputs and / or the marketing of the out...
Post a Comment
Read more

Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) (Updated as on September 11, 2026)

Reserve Bank of India (RBI) has issued the directions on maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) by banks. To whom are the directions applicable? The directions are applicable to the following Regulated Entities (REs) – Commercial Banks  Small Finance Banks (SFBs) Payments Banks (PBs) Local Area Banks (LABs) Regional Rural Banks (RRBs) Primary (Urban) Co-operative Banks (UCBs) Rural Co-operative Banks – State Co-operative Banks (StCBs) District Central Co-operative Banks (DCCBs) What is CRR? Every bank shall maintain in India by way of cash reserve, a sum equivalent to such percent of its Net Demand and Time Liabilities (NDTL) in India, as the RBI in terms of Section 42(1) of the RBI Act, 1934 (for scheduled banks) and Section 18(1) of the Banking Regulation Act (BR Act), 1949 (for non-scheduled banks) [including provisions of Section 18(1) of the BR Act as applicable to co-operative banks], may specify. What is incremental CRR? In terms of Secti...
Post a Comment
Read more

What is Ways and Means Advances (WMA)? (Updated as on September 25, 2026)

Reserve Bank of India (RBI) has recently announced the Ways and Means Advances (WMA) limit for the Government of India. So, what is WMA? What is Ways and Means Advances (WMA)? Ways and Means Advances (WMA) is a collateral free clean advance availed by the Central and State Governments from RBI, to tide over temporary mismatches in the receipts and payments. Section 17(5) of the Reserve Bank of India Act, 1934 empowers RBI to grant WMA to Central and State Governments, as and when required by them. What is Special WMA / Special Drawing Facility (SDF)? In addition to WMA, State Governments are also eligible for a Special Drawing Facility (SDF), which is granted against collateral of Government Securities held by the State Governments.  SDF availed by State Governments / UTs is linked to the quantum of their investments in marketable securities issued by the Government of India, including Auction Treasury Bills (ATBs).  (Updated as on June 28, 2024) Based on the recommendations m...
Post a Comment
Read more

Framework for Self-Regulatory Organisations in the FinTech Sector (Updated on September 10, 2026)

Reserve Bank of India (RBI) has released the framework for self-regulatory organisations in the FinTech sector. What are FinTechs? For the purpose of membership of an Self-Regulatory Organisations for FinTech Sector (SRO-FT), FinTechs may be defined as entities that provide technological solutions for delivery of financial products and services to businesses and consumers or encompass regulatory and supervisory compliance in partnership with traditional financial institutions or otherwise.  What is the need of Self-Regulatory Organisations for FinTech Sector? FinTechs play a pivotal role in redefining financial services by saving time, enhancing access, and lowering costs. While the FinTechs bring various innovations, the FinTech sector also raises concerns relating to customer protection, data privacy, cyber security, grievance handling, internal governance, financial system integrity, etc. A judicious balance between maximising the creative potential of FinTechs, while minimising...
Post a Comment
Read more