Credit and finance for MSMEs: The digital banking units (DBUs) launched in the country will provide end-to-end digital processing of small ticket retail and MSME loans, starting from online applications to disbursals, said Reserve Bank of India (RBI) Governor ShaktiKanta Das in his address at the virtual launch of DBUs recently. In his speech, published in RBI’s November bulletin on Saturday, Das said DBUs will also provide services related to certain identified government-sponsored schemes.
“The products and services in these units will be provided in two modes, namely, self-service and assisted modes, with the self-service mode being available on a 24x7x365 basis. The banks are also free to engage the services of digital business facilitators and business correspondents to expand the footprint of the DBUs.” Prime Minister Narendra Modi last month had launched 75 DBUs across 75 districts in the country to further financial inclusion and enhance the banking experience for people.
DBUs launch assumes significance for MSME loans as well with the central bank looking to enable end-to-end digitalisation of loans to SMEs in 2023 along with complete digitalisation of Kisan Credit Card (KCC)-based loans depending on the learnings from the ongoing pilot project of digitised KCC lending. In his address at the FICCI’s banking conference FIBAC 2022 earlier this month Das said the central bank hopes to launch digitised KCC and SME loans sometime during the calendar year 2023.
End-to-end digitalisation of loans to farmers and likewise for SME loans is expected to play a pivotal role in facilitating credit flow to the unserved and underserved rural population by making the credit process faster and more efficient, according to RBI.
Finance Minister Nirmala Sitharaman underscoring the significance of DBUs at the launch said, “As Reserve Bank Governor also explained, paperless operations will be available 24×7. Even cash deposit facilities or opening of a deposit of fixed deposit or recurring deposits, one can avail of all these services. Government’s credit link schemes through the Jan Samarth portal will also be available for ordinary users, MSME and retail loan users can benefit out of it.”