In digital banking push, industry eyes rural gains
The government has proposed setting up 75 digital banking units (DBUs) in 75 districts across India through scheduled commercial banks, an attempt at a major push to the growth in the digital economy.
Simply put, digital banking involves taking all traditional banking activity online — doing away with paperwork like cheques, pay-in slips, demand drafts and so on.
Finance Minister Nirmala Sitharaman made the proposal, which is expected to ensure the acceleration of digital payments across the country, in the Union Budget unveiled on Tuesday.
According to industry participants and stakeholders, the move will open up the rural market for service providers besides providing a boost to credit flow.
“The budget proposes to set up 75 digital banking units (DBUs) in 75 districts of the country by scheduled commercial banks. This proposal is in sync with our ongoing digital banking initiatives,” said Dinesh Khara, Chairman, SBI.
Indian Bank Managing Director (MD) and Chief Executive Officer (CEO) Shanti Lal Jain said this measure will accelerate the financing and augmenting credit flow to the economy.
According to Anand Kumar Bajaj, Founder, MD and CEO, PayNearby, for India to become a digital economy, villages should have the same access to digital resources as urban areas.
“To augment this, the setting up of 75 digital banking units in 75 districts of the country is a commitment to taking high-end tech to the bottom of the pyramid. This step will ensure that the benefits of digital banking reach every nook and corner of the country in a consumer-friendly manner,” he said.
Adding 75 digital banking units by scheduled commercial banks and opening full banking activities in 1.5 lakh Indian Postal Offices and permitting interoperability across banks for digital transfers will provide a big boost to fintech companies trying to grow into rural areas and are currently limited by digital awareness, said Archana Elapavuluri, Founder of Pickright Technologies.
Given the rapid rise of digital banking, digital payments, and FinTech innovation, it was critical to develop digital infrastructure to support digital banking, which has enormous potential, said Mandar Agashe, Vice-Chairman and MD, Sarvatra Technologies.