Lok Sabha Question No. 475 (UNSTARRED), answered on 2023-02-06
Subject: Setting up of Digital Banking Units
Ministry: FINANCE
Asked by: Manjulata Mandal, Ravi Kishan Shukla, Ravindra Kushawaha, Bholanath (B.P. Saroj), Subhash Ramrao Bhamre, Dhanush M Kumar, DNV Senthilkumar. S., Sunil Dattatray Tatkare, Amol Ramsing Kolhe, Ganesan Selvam, Supriya Sadanand Sule, Kuldeep Rai Sharma, C.N. Annadurai

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO. 475

ANSWERED ON MONDAY, FEBRUARY 6, 2023/MAGHA 17,1944 (SAKA)

## Setting up of Digital Banking Units

475. SHRIMATI MANJULATA MANDAL:

SHRI RAVI KISHAN:

SHRI RAVINDRA KUSHWAHA:

SHRI BHOLANATH (B.P. SAROJ):

DR. SUBHASH RAMRAO BHAMRE:

SHRI DHANUSH M. KUMAR:

DR. DNV SENTHILKUMAR S.:

SHRI SUNIL DATTATRAY TATKARE:

DR. AMOL RAMSING KOLHE:

SHRI SELVAM G.:

SHRIMATI SUPRIYA SULE:

SHRI KULDEEP RAI SHARMA:

SHRI C.N. ANNADURAI:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has set up digital banking units (DBUs) and if so, the details thereof along with the aims and objective of starting DBUs, State/UT-wise;
- (b) the manner in which DBUs will be different from traditional bank branch;
- (c) the factors taken into consideration while finalizing the list of districts for setting up of DBUs;
- (d) the present status of digitalisation in the Banking Sector;
- (e) whether the  Government has taken steps to  ensure  cent  percent  digital  transactions  in  Banking Sector and if so, the details thereof alongwith the challenges faced by the Government in this regard;
- (f) whether the Government is aware that most of the rural customers are not well versed with digital banking and if so, whether the Government is taking any steps to guide the rural population in availing digital banking services;
- (g) if so, the details thereof and if not, the reasons therefor; and
- (h) the steps taken/proposed to be taken by the Government to expand the DBUs across the country?

## Answer

The Minister of State in the Ministry of Finance (DR. BHAGWAT KARAD)

- (a) 75 Digital Banking Units (DBUs) have been dedicated to the service of the nation on October 16, 2022. As on date, 84 DBUs are operational across the country. DBUs have been introduced to further the objective of improving the availability of digital infrastructure while accelerating and widening the reach of digital banking services. State /UT-wise details of DBUs is Annexed.
- (b) DBUs are specialised  fixed-point  business  units  /  hubs  set  up  by  commercial  banks  providing certain  digital  infrastructure  for  delivering  digital  banking  products  &  services.  DBUs  provide digital  services  in  both  self-service  and  assisted  mode.  This  enables  customers  to  have  24*7 convenient access and enhanced digital experience in an efficient, paperless, secured and connected environment.
- (c) As informed by RBI and IBA, the broad parameters for selection of first 75 DBUs included:
- i) Tier-2 to Tier 6 centres (depending on the infrastructure availability);
- ii) Districts identified by RBI under the pilot programme 'Expanding and Deepening of Digital Payments Ecosystem'; and
- iii) Districts with high percentage of women population, youth, Ministry of Micro, Small & Medium Enterprises (MSMEs), geographically and strategically important locations, North-East area, SHG penetration and moderate level of digital adoption etc.
- (d & e)   Banks are adopting latest digital technologies to provide their customers with the enhanced and hassle-free banking services in a digital mode. Further, promotion of digital payment is one of the priorities  of  the  Government  to  facilitate  hassle  free  and  seamless  banking  transactions  for  the people of the country. Several initiatives have been taken by Government of India, RBI, NPCI and banks, to promote digital transactions and to create awareness about digital payments in the country. Some of the initiatives are BHIM-UPI, UPI-123, Aadhar Payment Bridge, AePS etc.

As a result of the initiative taken, there has been a paradigm shift in digital transactions in India which is reflected in terms of the increase in the volume of digital transactions over the last four financial years as illustrated below:

| Financial Year   | Volume (in lakhs)   |
|------------------|---------------------|
| 2018-19          | 2,32,602            |
| 2019-20          | 3,40,025            |
| 2020-21          | 4,37,445            |
| 2021-22          | 7,197,68            |

Source: RBI

As observed from the above table, there has been a growth of more than 200% in digital payment volume during the last four years since 2018-19. Further, as per the data sourced from National Payments Corporation of India (NPCI), UPI transactions registered in FY 21-22 were 45 billion, showing  8  times  growth  in  last  3  years  and  50  times  growth  in  last  4  years.  Also, the  AePS transactions during FY 21-22 have grown 4 times in last 3 years and 10 times since last 4 years.

- (f & g)  A pan-India Financial Literacy and Inclusion survey has been conducted by Reserve Bank of India (RBI),  based  on  3  parameters  namely,  financial  knowledge,  attitude  and  behaviour.  As  per  the survey done by RBI on a total score of 21, the average urban & rural score for different zones is provided below:

| Zone    |   Urban |   Rural |
|---------|---------|---------|
| North   |    11.5 |    11.5 |
| East    |    12.1 |    12.1 |
| Central |    12.5 |    12.1 |
| West    |    12.6 |    12.5 |
| South   |    11.2 |    10.3 |

Further, Government, RBI and Banks have taken various measures to promote and create awareness about digital banking services such as:

- i) The Digital Finance for Rural India - Creating Awareness and Access (DFIAA) Scheme for conducting awareness sessions on digital finance options available for rural citizens;
2. ii) Pradhan Mantri Gramin Digital Saksharta Abhiyaan Scheme is implemented as a Central Sector Scheme  by  Ministry  of  Electronics  &  Information  Technology  through  Common  Service Centres  (CSC)  e  -  governance  services  India  Ltd  with  active  collaboration  of  all  the  State governments and Union Territories (UTs);
3. iii) RBI conducts Electronic Banking Awareness and Training Programmes through its regional offices to create awareness about digital payments;
4. iv) RBI has been carrying out multi-channel public awareness media campaigns to sensitise public about how to be vigilant while using digital banking.  RBI has also carried out multi lingual media campaigns on themes like Convenience of Digital Banking, Safety of Digital Banking etc.;
- v) RBI conducts Financial Literacy week every year since 2016 to propagate financial education;
6. vi) Banks  conduct  special  camps  through  their  Financial  Literacy  Centres  (FLCs)  on  'Going Digital' through Unified Payments Interface (UPI) and *99# (USSD);
7. vii) Rural Branches of Banks conduct camps covering all the messages of Financial Awareness Messages Booklet and two digital platforms i.e. UPI and *99# USSD; and
8. viii) Banking Correspondents also create awareness while facilitating transactions in the rural areas because of their familiarity with local population.
9. (h)   In terms of the instructions issued by Reserve Bank of India on 'Establishment of Digital Banking Units' vide circular dated April 7, 2022, Scheduled Commercial Banks (other than Regional Rural Banks (RRBs), Payment Banks (PBs) and Local Area Banks (LABs) are permitted to open DBUs in Tier 1 to Tier 6 centres, unless otherwise specifically restricted, without having the need to take permission from RBI in each case.

*****

Part (a) of the Lok Sabha Unstarred Question No.475 for answer on 06.02.2023 regarding 'Setting up of Digital Banking Units'

| List of Digital Banking Units (DBUs)   | List of Digital Banking Units (DBUs)   | List of Digital Banking Units (DBUs)   | List of Digital Banking Units (DBUs)   |
|----------------------------------------|----------------------------------------|----------------------------------------|----------------------------------------|
| S. No                                  | STATE/ UT                              | Name of District/DBU                   | Bank allocated DBU                     |
| 1                                      | Andaman & Nicobar (UT)                 | Port Blair                             | State Bank of India                    |
| 2                                      | Andhra Pradesh                         | East Godavari                          | Union Bank of India                    |
| 3                                      | Andhra Pradesh                         | Machilipatam                           | Union Bank of India                    |
| 4                                      | Arunachal Pradesh                      | Papum Pare                             | Yes Bank                               |
| 5                                      | Assam                                  | Bongaigaon                             | Punjab National Bank                   |
| 6                                      | Assam                                  | Baksa                                  | State Bank of India                    |
| 7                                      | Bihar                                  | Patna (Danapur)                        | Jana Small Finance Bank                |
| 8                                      | Bihar                                  | Muzaffarpur                            | Jana Small Finance Bank                |
| 9                                      | Chandigarh (UT)                        | Chandigarh (Rural)                     | HDFC Bank                              |
| 10                                     | Chattisgarh                            | Balod                                  | State Bank of India                    |
| 11                                     | Chattisgarh                            | Mahasammand                            | State Bank of India                    |
| 12                                     | Dadra Nagar Haveli Daman and Diu (UT)  | Silvasa                                | Bank of Baroda                         |
| 13                                     | Goa                                    | North Goa                              | Punjab National Bank                   |
| 14                                     | Goa                                    | South Goa                              | State Bank of India                    |
| 15                                     | Gujarat                                | Vadodara                               | Bank of Baroda                         |
| 16                                     | Gujarat                                | Surat                                  | Bank of Baroda                         |
| 17                                     | Gujarat                                | Mehsana                                | Kotak Mahindra Bank                    |
| 18                                     | Gujarat                                | Surat                                  | Kotak Mahindra Bank                    |
| 19                                     | Haryana                                | Faridabad                              | HDFC Bank                              |
| 20                                     | Himachal Pradesh                       | Solan                                  | Indian Overseas Bank                   |
| 21                                     | Jammu & Kashmir (UT)                   | Jammu                                  | Jammu & Kashmir Bank                   |
| 22                                     | Jammu & Kashmir (UT)                   | Srinagar                               | Jammu & Kashmir Bank                   |
| 23                                     | Jharkhand                              | East Singhbhum                         | Bank of India                          |
| 24                                     | Jharkhand                              | Jamshedpur                             | DBS Bank                               |
| 25                                     | Jharkhand                              | Ranchi                                 | Jana Small Finance Bank                |
| 26                                     | Karnataka                              | Bangaluru Rural                        | Canara Bank                            |
| 27                                     | Karnataka                              | Raichur                                | Canara Bank                            |
| 28                                     | Karnataka                              | Mangaluru                              | Karanataka Bank                        |
| 29                                     | Karnataka                              | Mysuru                                 | Karanataka Bank                        |
| 30                                     | Kerala                                 | Ernakulam                              | Canara Bank                            |
| 31                                     | Kerala                                 | Thrissur                               | South Indian Bank                      |
| 32                                     | Kerala                                 | Palakkad                               | Union Bank of India                    |
| 33                                     | Ladakh (UT)                            | Leh                                    | Bank of Baroda                         |
| 34                                     | Lakshadweep (UT)                       | Kawarati                               | Canara Bank                            |
| 35                                     | Madhya Pradesh                         | Itarsi (Hoshangabad)                   | Axis Bank                              |
| 36                                     | Madhya Pradesh                         | Indore                                 | Bank of Baroda                         |
| 37                                     | Madhya Pradesh                         | Sagar                                  | Union Bank of India                    |
| 38                                     | Maharashtra                            | Aurangabad                             | Bank of Maharashtra                    |
| 39                                     | Maharashtra                            | Satara                                 | Bank of Maharashtra                    |
| 40                                     | Maharashtra                            | Nagpur                                 | Union Bank of India                    |

|   41 | Manipur           | Kakching               | State Bank of India   |
|------|-------------------|------------------------|-----------------------|
|   42 | Meghalaya         | Ri Bhoi (Aspirational) | State Bank of India   |
|   43 | Mizoram           | Aizawl                 | Punjab National Bank  |
|   44 | Nagaland          | Kohima                 | ICICI Bank            |
|   45 | Nagaland          | Dimapur                | IDFC FIRST Bank       |
|   46 | NCT of Delhi (UT) | South Delhi            | Indian Bank           |
|   47 | NCT of Delhi (UT) | West Delhi             | Punjab National Bank  |
|   48 | Odisha            | Khurda                 | Bank of India         |
|   49 | Odisha            | Keonjhar               | IDFC FIRST Bank       |
|   50 | Odisha            | Puri                   | UCO Bank              |
|   51 | Odisha            | Cuttack                | UCO Bank              |
|   52 | Puducherry (UT)   | Puducherry             | ICICI Bank            |
|   53 | Puducherry (UT)   | KARAIKAL               | Indian Bank           |
|   54 | Punjab            | Janlandhar             | IndusInd Bank         |
|   55 | Punjab            | Faridkot               | Punjab & Sind Bank    |
|   56 | Punjab            | Ludhiana               | Punjab & Sind Bank    |
|   57 | Punjab            | Patiala                | Union Bank of India   |
|   58 | Rajasthan         | Bundi                  | Axis Bank             |
|   59 | Rajasthan         | Vijaynagar, Bhilwara   | Axis Bank             |
|   60 | Rajasthan         | Kota                   | Bank of Baroda        |
|   61 | Rajasthan         | Karauli                | Bank of Baroda        |
|   62 | Sikkim            | East Sikkim            | State Bank of India   |
|   63 | Sikkim            | North Sikkim           | State Bank of India   |
|   64 | Sikkim            | West Sikkim            | State Bank of India   |
|   65 | Tamilnadu         | Virudhnagar            | Canara Bank           |
|   66 | Tamilnadu         | Coimbatore             | Canara Bank           |
|   67 | Tamilnadu         | Karur                  | ICICI Bank            |
|   68 | Tamilnadu         | Thanjavur              | Indian Overseas Bank  |
|   69 | Tamilnadu         | Chengalpattu           | IndusInd Bank         |
|   70 | Telangana         | Khammam                | City Union Bank       |
|   71 | Telangana         | Jangaon                | State Bank of India   |
|   72 | Telangana         | Rajanna                | State Bank of India   |
|   73 | Tripura           | Gomati                 | Punjab National Bank  |
|   74 | Tripura           | West Tripura           | Union Bank of India   |
|   75 | Uttar Pradesh     | Varanasi               | Bank of Baroda        |
|   76 | Uttar Pradesh     | Kanpur Dehat Rural     | Bank of Baroda        |
|   77 | Uttar Pradesh     | Lucknow                | Indian Bank           |
|   78 | Uttar Pradesh     | Jhansi                 | Punjab National Bank  |
|   79 | Uttarakhand       | Haridwar               | HDFC Bank             |
|   80 | Uttarakhand       | Dehradun               | ICICI Bank            |
|   81 | Uttarakhand       | Nainital               | Punjab National Bank  |
|   82 | West Bengal       | North 24 Paraganas     | Federal Bank          |
|   83 | West Bengal       | South 24 Paraganas     | HDFC Bank             |
|   84 | West Bengal       | Nadia                  | Punjab National Bank  |