“Explore the introduction of e-Rupee in India, a Central Bank Digital Currency (CBDC) by RBI. Learn about its benefits, adoption by banks, and potential impact on the financial landscape. Stay informed on the future of digital currency in India.”
I recently attended a panel discussion entitled Roundtable on Introduction of e-Rupee held at IMC Chamber of Commerce & Industry.
Panelists included General Manager-RBI, Former CMD-Corporation Bank, Senior Group President-YES Bank, Former ED-RBI, etc.
India has taken a lead by introducing CBDC (Central Bank Digital Currency) popularly named e-Rupee or digital Rupee, even though small countries like Bahamas with very less population have digital currency.
Even USA is doing research/study to see if it can introduce e-Dollar in 2025. Major countries are observing introduction of e-Rupee in India. About 105 countries are in thought process to introduce e-currency.
Basic idea of this introduction by RBI is to :
1. modernize currency management system,
2. reducing the cost of currency printing which is about Rs.3,000 crs and
3. control fake currency to some extent.
Initially this was pilot project with franchise given to four banks, SBI, YES Bank, ICICI Bank and IDFC First bank to offer e-Rupee to their customers. With this pilot project proving satisfactory, it is now extended to nine more banks.
Whereas the UPI payments are between bank to bank, transfer of e-Rupee is between a person to another, i.e., from one wallet to another. While UPI payments are legal liability of commercial banks, e-Rupee is the legal liability of RBI, just like paper currency. E-rupee is available in tokens of 50 paise, 1 rupee, 2 rupee, 5, 10,20, 50 and so on.
E-rupee in one’s wallet (in his mobile) can be redeemed.
Cash circulation in India is about 31 lakh crores. Out of this, about Rs.6.05 cr is in digital rupee form as of now.
In Q/A session, one person asked, in case of UPI payment like Google pay, payment is easy as there is no question of converting to e-currency, and so afford direct payment. But in case of e-Rupee, one has to first convert currency to e-currency in his wallet. The reply given by panelist was even if one is using Google pay, etc. he will be having some physical currency left in his purse and there are chances of this getting picked.
On the basis of print media report few days back, on RBI Governor’s comment that problem of cloning is to be addressed, I queried how safe is e-Rupee if someone tries to clone digital rupee just like counterfeit notes. The reply given by a panelist was that every digital rupee (which is called token) is numbered just like currency notes, and this problem is fully taken care of. Whereas, in counterfeit currency there is no control, he said.
As things move one, e-rupee will enable cross-border payments also, eg EXIM transactions.
Author: Guruprakash N. Bhambore, Secretary, The Bombay Commodity Association Ltd