EXCLUSIVE: Indian Banks Take Action to Boost Digital Currency Transactions!

• Currently, Indian banks are planning to offer various incentives to users who use digital currencies as a payment method within the country.
• The Reserve Bank of India (RBI) had prepared a pilot program for the central bank digital currency (CBDC) called e-rupee last year with the aim of increasing the number of daily digital currency transactions.
• According to Parag Rao, these plans to offer such incentives have been made in line with the goal of expanding the scale of these transactions.

Indian banks will start encouraging digital currency transactions, following the Reserve Bank of India’s efforts to increase digital currency transactions.

Indian Banks to Promote Digital Currency Transactions

Indian banks are set to promote digital currency transactions following the Reserve Bank of India’s efforts to increase the transaction volume of the central bank digital currency (CBDC) called e-rupee.

At present, Indian banks are planning to offer various incentives to users who use digital currencies as a payment method within the country. These incentives include cashbacks and reward points that are almost similar to cash rebates and reward points offered by banks through their credit or debit cards.

The Reserve Bank of India (RBI) had prepared a pilot program for the central bank digital currency (CBDC) called e-rupee last year with the aim of increasing the number of daily digital currency transactions. However, despite the RBI’s significant efforts, retail transactions are falling short of the desired target and are not exceeding approximately 25,000 transactions per day. These challenges have ultimately led the central bank to introduce such incentives.

Furthermore, the central bank is focused on attracting more users by adding new features that bring digital currencies into India’s highly desired instant payment system UPI (Unified Payments Interface).

Other Indian Banks Begin to Boost India’s Digital Currency Initiative

According to Parag Rao, the President of Payment, Liabilities, Consumer Finance, and Markets at HDFC, one of India’s leading private banks, these plans to offer such incentives are in line with the goal of expanding the scale of these transactions. Smaller private lending banks such as Yes Bank and IDFC First Bank are also planning to offer reward points that can be converted into cash for various purposes such as travel reservations, mobile recharges, and highway tolls.

According to a spokesperson for Yes Bank, the decision to offer these ‘time-limited promotional incentives’ aimed at promoting the growth and development of the CBDC is part of the bank’s digital strategy. In addition, other banks such as ICICI Bank and Union Bank are also making plans to offer similar benefits to users who use digital currencies as a payment method.