IndusInd Bank pilots E-Rupee payments with farmers

IndusInd Bank me a move on Monday by piloting transactions using Reserve Bank of India's digital currency, known as e-rupee, to facilitate payments to farmers for carbon credits.

Through this initiative, private lender is leveraging programmable version of RBI's digital currency to enable farmers to exchange ir carbon credits directly for e-rupees. Previously, farmers could only convert ir credits into fiat rupees.

pilot project, conducted in collaboration with 50 farmers in Maharashtra, marks a pioneering step in incorporating digital currency solutions into agricultural transactions. IndusInd Bank plans to scale up this initiative, aiming to streamline processes and enhance efficiency in payments for carbon credits.

In a statement filed with exchange, bank highlighted its role in crafting digital wallets and managing seamless transfer of CBDCs (Central Bank Digital Currencies) as part of this initiative.

RBI's efforts to promote its central bank digital currency gained momentum with introduction of distributed ledger technology in 2022. This technology enables secure and transparent transactions, laying groundwork for widespre option of digital currencies.

IndusInd Bank's collaboration with farmers in Maharashtra reflects a broer trend of integrating digital solutions to modernize tritional payment systems. As RBI continues to work with financial institutions to enhance features and accessibility of digital currencies, initiatives like this pave way for a more inclusive and efficient financial ecosystem.

(With Reuters inputs)