Prime Minister Narendra Modi on Sunday said the digital banking initiative will further strengthen the financial system and help make the economy “future-ready”. He launched, via video conference, 75 digital banking units (DBUs) that are spread over 75 districts across the country, mainly in remote areas.
The Indian banking system, the Prime Minister said, has gone beyond just financial transactions and has emerged as a medium of ‘good governance’ and ‘better service delivery’.
“Digital economy today is a great strength of our economy, of our start-up world, of Make in India and of self-reliant India,” he said.
Leveraging technological prowess to deliver public goods has been the hallmark of this government, and this has also helped in eliminating the digital divide as well as corruption, the Prime Minister said. The government has transferred Rs 25 trillion directly to beneficiaries via the direct benefit transfer (DBT) scheme. Another instalment of support to farmers under the PM-KISAN scheme will be transferred on Monday. Under this, farmers get Rs 6,000 per year in three equal instalments.
He also attributed India’s sustained economic growth to the efforts of the BJP government to replace pre-2014 ‘phone banking’ with ‘digital banking’.
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In a dig at the previous UPA regime, Modi said, under the ‘phone banking’ earlier, instructions were given on phone to banks on whom they must lend to and at what terms and conditions. This ultimately led to the bad loan crisis. The country under the current government has moved from the infamous “phone banking” system to digital banking, he added.
He highlighted the initiatives taken by his government to strengthen the banking system following indiscriminate lending during the UPA era. “After bringing transparency in the identification of NPAs, lakhs of crores of rupees were brought back into the banking system. We recapitalized banks, took action against wilful defaulters, and reformed the Prevention of Corruption Act,” he noted.
The formulation of the Insolvency and Bankruptcy Code has further helped in the resolution of non-performing assets in a transparent manner, he added.
The DBUs that the PM launched will essentially be brick-and-mortar outlets. These will provide a range of digital banking facilities to customers, including opening of savings account, transfer of funds, investment in fixed deposits, loan applications, stop-payment instructions for cheques issued, applications for credit and debit cards, payment of taxes and bills. Moreover, there will be adequate digital mechanisms to offer real-time assistance to customers and redress their grievances.
In the Budget for FY23, finance minister Nirmala Sitharaman had announced the setting up of 75 DBUs to commemorate the 75 years of independence.
The DBUs belong to 11 state-run banks, 12 private-sector banks and one small finance bank.