RBI to expand e-Rupee's retail access beyond banks

RBI e-rupee expansion: Reserve Bank of India (RBI) is set to broen accessibility of e-rupee to retail users through non-bank payment system operators, including third-party payment app providers, central bank announced on Friday.

Initially piloted in 2023, central bank digital currency (CBDC), leveraging distributed-ledger technology, was restricted to transactions facilitated solely by banks, resulting in subdued transaction volumes. In response, RBI is proposing that non-bank payment system operators, such as PhonePe, Google Pay, and Paytm, extend offering of e-rupee through CBDC wallets.

"This initiative aims to enhance access and expand choices available to users, while also assessing resilience of CBDC platform in handling multi-channel transactions," stated RBI in its Statement on Developmental and Regulatory Policies.

central bank will implement necessary changes to system to facilitate this expansion.

According to a source familiar with pilot, RBI's decision aims to bolster transaction volumes for retail CBDC. However, process is still in its nascent stages, and third-party apps will need to obtain RBI approval to offer CBDC wallets.

Currently, e-rupee boasts 4.6 million retail users and 400,000 merchants, as revealed by RBI Deputy Governor T. Rabi Sankar in a post-policy press conference.

In efforts to augment e-rupee transactions, RBI introduced new features and widened its usage, including integration with Unified Payment Interface (UPI), India's renowned real-time payments system, and introducing programmability to enable targeted cash transfers, such as those to farmers.

se expanded use cases have contributed to uptick in transactions, Sankar noted.

Notably, Indian banks facilitated disbursement of certain employee benefits through e-rupee in December, assisting RBI in achieving its target of one million daily transactions by end of 2023, as reported by Reuters in January.

(With Reuters inputs.)