Fintech firms seek to build on Digital Banking Units in bid to boost digital infrastructure
Fintech firms are exploring market opportunities as the government focuses on financial inclusion through digitisation. On Sunday, Prime Minister Narendra Modi launched 75 Digital Banking Units, or DBUs, noting that if Jan Dhan accounts had laid the foundation of financial inclusion in the country, then fintech would form the basis of a financial revolution.DBUs are brick-and-mortar outlets that provide facilities such as account opening, balance checks, fund transfers, fixed deposit investments, loan applications, credit and debit card applications, tax and bill payments, etc.
According to Delhi-based fintech solutions provider Next Gen, the firm is looking to build the foundations for the DBU.
"There is a need to bring in technology-based solutions to reduce the operational costs for these institutions and enable easy finance availability in tier two and three cities and rural areas of India. And the way to enable this solution, we must target the whole gamut of humble feature phone users," said Taron Mohan, founder of Next Gen.
On the launch of DBUs, Reserve Bank of India governor Shakitkanta Das had said that DBUs will further augment the country's digital infrastructure.
"This will act as an enabler in the digital ecosystem and will improve customer experience by facilitating seamless banking transactions," he said, noting that the DBUs will augment efforts to promote financial inclusion by providing banking services in a paperless, efficient, safe and secure environment.
In April, the Reserve Bank of India (RBI) issued guidelines allowing scheduled commercial banks to open DBUs. According to the circular, DBUs will be specialised fixed-point business units for delivering digital banking products and services as well as servicing existing financial products and services digitally.
As per the RBI circular, establishment of DBUs should be part of the digital banking strategy of a bank, and each DBU will be headed by a sufficiently senior and experienced executive of the bank, who can be designated as the chief operating officer (COO) of the DBU.
This story originally appeared on: India Times - Author:Tax Cognition
