Digital Banking Units

• Vaid's ICS, Lucknow
• 23, Apr 2022

Topics:  GS III

Why in News?

• The Finance Minister in her Budget announcement envisaged setting up 75 digital banking units in 75 districts of the country.

Digital Banking Units:

History:

In India, digital banking started taking shape in the late 1990s with ICICI Bank being the first one to bring the service to their retail clients.

Meaning:

• It is a business unit or hub with some digital infrastructure that helps in delivering banking products and services, in a digital form, in self-service mode.
• In simpler language, all the traditional bank work like depositing cheques, pay-in slips etc., will happen digitally in these units.

Players:

• 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 tier 6 centres.
• They are not required to take permission from the Reserve Bank of India (RBI) in each case.

Need:

• This is being done to give a push to financial inclusion in the country.
• It was announced in order to ensure that digital banking reaches every nook and corner of the country and increases the speed of payments.

Services:

• Helping in opening saving accounts to receive money under government schemes.
• Helping the customers in making Fixed deposits (FDs) and Recurring Deposits (RDs) along with internet banking.
• Providing digital kits for merchants as well as customers.
• Providing UPI QR Code and Point of Sale (PoS) mechanism.
• Supply of Debit and credit cards, allowing ATM transactions.
• Helping customers with the application for MSME loans.

Other functions:

• Other services include making applications for and onboarding of customers for identified retail, MSME or schematic loans.
• This may also include end-to-end digital processing of such loans, starting from online application to disbursal and identified government sponsored schemes that are covered under the national portal.

Global Scenario:

• Digital banks have been around since 2014-15 in markets such as Hong Kong, Singapore, Malaysia, China, the UK and the US.

FACTS FOR PRELIMS

NATPOLREX-VIII:

• It is the 8th edition of the National Level Pollution Response Exercise.
• Conducted by Indian Coast Guard (ICG) off Mormugao harbour, Goa.
• The objective of NATPOLREX-VIII is to enhance the preparedness and response capability of all the stakeholders in combating marine spills.
• It aims at validating the procedures and guidelines as contained in the National Oil Spill Disaster Contingency Plan (NOSDCP) at the national and regional levels.

Vagsheer:

• Vagsheer, the sixth submarine of the P75 project of the Indian Navy was launched recently.
• It is the last of the Scorpene class submarines made under the P75 project.
• Under P75, INS Kalvari, INS Khanderi, INS Karanj and INS Vela have been commissioned. Sea trials are on for Vagir.

Vagsheer is named after the sand fish, a deep sea predator of the Indian Ocean. The first submarine Vagsheer, from Russia, was commissioned into the Indian Navy on December 26, 1974, and was decommissioned on April 30, 1997.

What is a ‘Poison Pill’ defence?

Twitter has countered Elon Musk’s offer to buy the company for more than $43 billion with a corporate tool known as a poison pill, a defensive strategy familiar to boardrooms trying to fend off takeovers but less familiar to everyday investors.

• This defense mechanism was developed in the 1980s as company leaders, facing corporate raiders and hostile acquisitions, tried to defend their businesses from being acquired by another enterprise, person or group.
• A poison pill is a maneuver that typically makes a company less palatable to a potential acquirer by making it more expensive for the acquirer to buy shares of the target company above a certain threshold.