Swiping Slow: The Curious Case of India’s Sparse Digital Banking Units

Despite India's digital banking revolution and the launch of 75 Digital Banking Units (DBUs) in 2022 to mark 75 years of independence, the spread of these units remains thin. Banks were given just 45 days to set up each DBU, after inflexible government specifications for their location-majority in rural and semi-urban areas. This "one-size-fits-all" approach did not take into account local needs, and it led to resource mismatches and underutilization in some places.

 

Exorbitant operating costs, especially the requirement for DBUs to be separate from existing branches with separate access points, are cited by bankers as a major dampener. In the majority of non-metro areas, digital banking customers still remain limited, and it is hard to make a case for the expense. As a result, even big banks have opened only a handful of DBUs each, and the rollout nationwide has stalled, highlighting the need for more flexible, location-specific solutions.

 

Source: The Hindu BusinessLine