Explorer

RBI Rolls Out First Pilot Project For Retail Digital Rupee In 4 Cities

The retail digital rupee (e₹-R) project has started in a closed user group with the participation of four banks -- SBI, ICICI Bank, Yes Bank and IDFC First Bank -- as well as customers and merchants

The Reserve Bank of India (RBI) on Thursday launched the first pilot project for retail digital rupee in Mumbai, New Delhi, Bengaluru, and Bhubaneswar.

The retail digital rupee (e₹-R) project has started in a closed user group with the participation of four lenders -- State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank -- as well as customers and merchants.

The launch comes a month after the Reserve Bank of India (RBI) started a pilot in the digital rupee - wholesale on November 1.

In the second phase of retail digital rupee project, nine more cities and four more banks will be included.

The e₹-R is in the form of a digital token that represents legal tender and would offer "features of physical cash like trust, safety and settlement finality", according to the RBI.

"As in the case of cash, it will not earn any interest and can be converted to other forms of money, like deposits with banks," the central bank said while announcing the pilot project on November 29.

The use of digital rupee is also expected to reduce the operational costs related to management of physical currency as well as increase financial inclusion in the economy.

In a release on Thursday, Yes Bank said it rolled out the RBI's CBDC (Central Bank Digital Currency) for its closed user group, comprising its retail customers and merchants.

During the pilot phase, access to the Yes Bank Digital Rupee app will be given to the bank's select retail customers who will be part of the closed user group, it added.

CBDC is a digital form of currency notes issued by a central bank. While most central banks across the globe are exploring the issuance of CBDC, the key motivations for its issuance are specific to each country's unique requirements.

Based on the requirements placed by banks, digital rupee will be created by the RBI using latest technology and digitally issued to the banks in a secure manner.

Customers will be able to place the request for digital rupee through the digital wallet in their mobile app provided by the banks and the requested amount would get credited to their digital rupee wallets.

The users will be able to transact with e₹-R through a digital wallet offered by the participating banks and stored on mobile phones/devices.

Transactions can be both Person to Person (P2P) and Person to Merchant (P2M). Payments to merchants can be made using QR codes displayed at merchant locations.

Eight banks have been identified for phase-wise participation in the pilot project.

After State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank, four more banks -- Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank -- will join the pilot project.

The other nine cities to which the pilot will be later extended are Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla.

The scope of the pilot project may be expanded gradually to include more banks, users and locations as needed, as per the RBI.

Last month, the RBI said digital rupee - wholesale will help in reducing transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk.

The central government announced the launch of the digital rupee from fiscal year 2022-23 onwards in the Union Budget tabled in Parliament on February 1, 2022.

In a recent concept note, the RBI said CBDC is aimed to complement rather than replace current forms of money and is envisaged to provide an additional payment avenue to users, not to replace the existing payment systems.

Across the globe, more than 60 central banks have expressed interest in CBDCs with a few implementations already under pilot across both retail and wholesale categories and many others are researching, testing, and/or launching their own CBDC framework.

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.

View More
Advertisement
Advertisement
25°C
New Delhi
Rain: 100mm
Humidity: 97%
Wind: WNW 47km/h
See Today's Weather
powered by
Accu Weather
Advertisement

Top Headlines

Indian Army Resumes Restricted Patrolling At Depsang Plains As Disengagement With China Progresses
Indian Army Resumes Restricted Patrolling At Depsang Plains As Disengagement With China Progresses
'Such Violent Acts Will Never Weaken India’s Resolve': PM Modi Condemns Attack On Hindu Temple In Canada
'Such Violent Acts Will Never Weaken India’s Resolve': PM Modi Condemns Attack On Hindu Temple In Canada
'I Have My Own Faith...': CJI Chandrachud Breaks Silence On 'Praying To God' For Solution To Ayodhya Case
'I Have My Own Faith...': CJI Chandrachud Breaks Silence On 'Praying To God' For Solution To Ayodhya Case
Chhath Puja: Packed Stations, Passengers Standing In Toilets As Overloaded Trains Struggle With Festival Rush
Chhath Puja: Packed Stations, Passengers Standing In Toilets As Overloaded Trains Struggle With Festival Rush
Advertisement
ABP Premium

Videos

Almora Bus Accident: Bus Carrying 42 Plunges Into Ravine in Uttarakhand | ABP NewsBreaking News: Poster Wars Heat Up in Lucknow Ahead of UP By-Elections | ABP NewsManoj Jarange Makes Bold Declaration Ahead of Maharashtra Elections 2024UP News: Political Resolution Looms for UP's 69,000 Teacher Recruitment Saga Ahead of By-Elections

Photo Gallery

Embed widget