In an effort to boost transactions, the Reserve Bank of India (RBI) has urged a larger group of institutions to participate in pilot projects using the central bank digital currency (CBDC), three bankers told Reuters on Wednesday. By the end of the decade, nearly two dozen central banks from both emerging and developed economies anticipate putting digital currencies into use, according to a poll conducted by the Bank for International Settlements (BIS) and released on Monday.
The RBI started testing CBDCs, also known as e-rupees, in the wholesale and retail markets last year.
Large state-owned and private lenders at the moment include State Bank of India, Bank of Baroda, ICICI, HDFC, Kotak Mahindra, and Yes Bank, among others.
"The RBI has asked smaller banks to either tie up with fintech players or develop their systems to start CBDC pilots this year," said the technology head of a state-owned bank, who was present at the meeting with RBI officials on Tuesday.
"Now that potential fintech partners are on board, we must launch tenders and assess the associated expenses. It's anticipated that this process would take four to five months.
Because they were not authorised to speak to the media, the bankers did not want their names to be used.
By the end of this year, the RBI hopes to meet its goal of one million CBDC transactions daily, according to T Rabi Sankar, the deputy governor of the central bank.
There were 0.3 million business owners and 1.3 million consumers.
Another banker with a state-owned bank explained that by encouraging more banks to take part, the RBI hopes to identify any implementation hiccups and perform pilots on a sizable user base.
"We have advanced in our approach to the RBI for a CBDC pilot. Within the next one to two months, we anticipate receiving the approval.
The smaller banks have also been instructed by the central bank to ask the pilots' operators for input, according to the bankers.
A request for comment sent by Reuters via email was not immediately answered by the RBI.
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