Several leading banks in India are joining forces to promote the use of the e-rupee, a central bank digital currency introduced by the Reserve Bank of India. In a bid to encourage wider adoption, these banks have introduced various incentives, including cashbacks and rewards, akin to those offered on credit and debit cards. The move aims to accelerate e-rupee transactions, which have so far fallen short of the Reserve Bank of India’s ambitious targets.
HDFC Bank, the largest private lender in India, is at the forefront of this initiative. According to Parag Rao, a senior executive at the bank, HDFC has already implemented incentives to stimulate e-rupee transactions. However, specific details regarding the nature of these incentives were not disclosed.
Not to be outdone, smaller financial institutions such as Yes Bank and IDFC First Bank have also rolled out similar incentives to promote e-rupee usage. These incentives include reward points that can be redeemed for a range of benefits, including car rentals, phone recharges, and cashback through the FastTag highway toll collection system. A spokesperson for Yes Bank emphasized that these incentives are integral to the bank’s digital strategy aimed at increasing e-rupee adoption.
Expansion of CBDC incentives across banks
The momentum for incentivizing e-rupee adoption is expected to grow further, with other prominent banks like Union Bank and ICICI Bank planning to introduce similar incentive programs. It is important to note that these incentives will be funded by the banks themselves.
The e-rupee, launched in December of the previous year, has faced challenges in gaining widespread acceptance. Daily transactions involving the digital currency currently hover around 25,000, a significant distance from the central bank’s target of achieving one million daily transactions by the end of the year.
The Reserve Bank of India has also been proactive in its efforts to attract users to the e-rupee. One notable strategy is linking the digital currency to India’s popular real-time payments network, the Unified Payment Interface (UPI). This integration seeks to streamline the adoption of e-rupee for everyday transactions, making it more accessible to the general public.
India’s venture into central bank digital currencies is part of a broader global trend. Many central banks worldwide are exploring the potential of CBDCs to tap into the growing digital assets economy. Nigeria, for instance, has introduced its own CBDC, albeit with limited success, as mentioned in the report. Nevertheless, countries across the globe continue to express interest in CBDCs, with several preparing to launch their own in the near future