RBI permits banks to outsource e-banking units

The RBI has announced guidelines for banks to set up specialised digital banking units (DBUs) distinct from regular bank branches using the outsourced model. The new norms are in line with a Budget announcement and are based on the recommendation of a panel comprising members of the RBI and banking industry.

“Scheduled commercial banks (other than regional rural banks, payment banks and local area banks) with past digital banking experience are permitted to open DBUs in tier-1 to -6 centres, unless otherwise specifically restricted, without having the need to take permission from the RBI in each case,” the central bank said.

The RBI said that banks are free to adopt either an insourced or outsourced model for operations of the DBUs. These are also allowed to use application programming interfaces (APIs) to connect with external third-party app providers. However, these apps have to be tested in an isolated environment before being integrated with the bank’s systems.

The minimum bouquet of products that the DBUs are expected to provide include account-opening kits, digital kits for mobile banking, internet banking, debit cards, credit card and mass transit system cards. In her Budget speech, finance minister Nirmala Sitharaman had said that to ensure that benefits of digital banking reach every nook and corner of the country in a consumer-friendly manner, it is proposed to set up 75 DBUs in 75 districts by scheduled commercial banks.