RBI Allows Retail Distribution Of e-Rupee Through Non-Bank Payment System Operators

The Reserve Bank of India has allowed the distribution of central bank digital currency, or e-rupee, to retail users through non-bank payment system operators, Governor Shaktikanta Das said in the monetary policy statement on Friday.

"It is proposed to make CBDC-retail accessible to a broader segment of users by enabling non-bank payment system operators to offer CBDC wallets," Das said.

This will help the central bank test whether the CBDC platform is resilient enough to handle multi-channel transactions, he said.

On Dec. 27, transactions through CBDC crossed the milestone of the 1 million in a single day for the first time.

In the post policy press conference, RBI Deputy Governor T. Rabi Sankar said that interoperability of CBDC with UPI helped a lot in achieving this target.

However, volumes have now come down and it is being observed that they are shifting towards person-to-merchant (P2M), from person-to-person (P2P) transactions, Sankar said.

As per the current data, he said there are about 50 lakh participants of CBDC. Of these, around 4 lakh are merchants and a total of 2.2 crore transactions have been done.

In February's monetary policy announcement, RBI introduced programmability and offline functionality for CBDC-R pilot.

Referring to those announcements, Sankar said that the first use-case of programmability started on Friday and is for the benefit of farmers. Other cases too, are being developed and would be introduced soon.

As far as the offline functionality is concerned, he added that while it has been developed, currently, it is only being tested in a closed group within banks.

"Once it settles, we will open it for outside also," Sankar said while responding to reporters' questions.

In December 2022, the central bank launched the CBDC pilot in the retail segment within a closed user group comprising participating customers and merchants. The first phase of the pilot included participation from four banks, namely the State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank.

Subsequently, another four banks — Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank also joined the pilot programme.

CBDC pilots are currently underway with more use-cases and participating banks, Das said.