RBI releases guidelines on establishment of digital banking units

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"For front-end or distribution layer of digital banking, each bank would choose suitable smart equipment, such as Interactive Teller Machines, Interactive Bankers, Service Terminals, Teller and Cash Recyclers, Interactive Digital Walls, Document uploading, self-service card issuance devices, Video KYC Apparatus, secured and connected environment for use of own device for digital banking, Video Call / Conferencing facilities, to set up an DBU. These facilities can be insourced or outsourced while complying with relevant regulatory guidelines," it said.

Further, the bank said, "Each DBU must offer certain minimum digital banking products and services. Such products should be on both liabilities and assets side of the balance sheet of the digital banking segment. Digitally value-added services to conventional products would also qualify as such."

In order to accelerate digital banking initiatives, each DBU will be 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 the chief operating officer of the DBU, the RBI said.

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In addition to ensuring the physical security of the infrastructure of the DBU, adequate safeguards for the cyber security of the DBUs will have to be ensured by the banks, the apex bank said.

Also, the Board or a Committee of the Board shall review the progress and key performance indicators of digital banking services including that of DBU separately at a suitable periodicity. The review should cover both business and risk aspects of the segment, it added.