Fintech challenge is a fantasy

Digital banks are a threat, not so much to banks as to banking stability on account of the systemic risk they pose

The government is poised to launch 75 digital banks soon, so the headlines proclaimed. If you thought a sleek set of new banks was going to challenge incumbents, you would have been mistaken. What will be launched are Digital Banking Units (DBUs). These are a new way of making available digital products of existing banks and non-banking financial companies (NBFCs).  

What exactly are DBUs? The Reserve Bank of India (RBI) has a definition that runs into four lines. In essence, these are outlets where people can avail of banking products mostly on their own. There will be personnel to assist them