RBI Proposes Cash Deposit via UPI and Widens Scope of CBDC

RBI Proposes Cash Deposit via UPI and Widens Scope of CBDC

RBI's Proposal for Cash Deposits via UPI:

The Reserve Bank of India (RBI) has put forth a proposal to facilitate cash deposits in banks through the Unified Payment Interface (UPI) mechanism. Currently, cash deposits in Cash Deposit Machines (CDMs) primarily rely on debit cards. However, building on the success of card-less cash withdrawal using UPI at ATMs, the RBI aims to extend this functionality to cash deposits as well. RBI Governor Shaktikanta Das emphasized that enabling cash deposits via UPI would enhance customer convenience and streamline currency-handling processes at banks.

Expansion of UPI Payments through PPI Wallets:

In addition to cash deposits, the RBI has proposed allowing UPI payments through Prepaid Payment Instruments (PPI) wallets. Presently, UPI payments from PPIs are limited to using the web or mobile apps provided by the PPI issuer. The proposed measure seeks to permit the use of third-party UPI apps for making payments from PPI wallets, thereby boosting customer convenience and encouraging digital payments for small-value transactions.

Widening Access to CBDC:

The RBI is also working towards expanding access to Central Bank Digital Currency (CBDC) to a broader segment of customers. This includes enabling non-bank payment system operators to offer CBDC wallets, thus making CBDC Retail accessible to a wider user base. Currently, CBDC pilots are underway, with increasing use cases and participating banks. The move to involve non-bank payment system operators aims to test the resilience of the CBDC platform in handling multi-channel transactions.

Introduction of Mobile App for Retail Direct Scheme:

Furthermore, the RBI has proposed launching a mobile app for accessing the Retail Direct portal, which was introduced in November 2021. The Retail Direct Scheme allows retail investors to directly invest in government securities (G-Secs). Introducing a mobile app for this scheme is expected to enhance convenience for retail investors and deepen the G-Sec market.

Conclusion:

In conclusion, the RBI's proposals aim to leverage technology to enhance convenience, efficiency, and accessibility in financial transactions, while also promoting digital payments and expanding the reach of CBDC. These initiatives align with the broader goal of fostering financial inclusion and advancing India's digital economy.