The Reserve Bank of India (RBI) has decided to expand its CBDC pilot to more banks and locations throughout the country. This information was provided in the annual report of the bank which was released on May 30. RBI also plans to incorporate more features into its digital currency in the financial year 2023-24.
The CBDC pilot started with four banks namely State Bank of India, IDFC First Bank, Yes Bank and ICICI Bank. After that four more players which include HDFC Bank, Kotak Mahindra Bank, Bank of Baroda and Union Bank of India were included and now five more banks including the Canara Bank, Axis Bank, Punjab National Bank, Federal Bank and IndusInd Bank have joined the pilot.
A Gradual Step Towards Successful CBDC Implementation
According to the Reserve Bank’s annual report, the implementation of its CBDC took place gradually throughout the year. The programs for the Digital Rupee in the wholesale segment were initiated on November 1, 2022, followed by the retail segment on December 1, 2022. Before conducting these pilots, the RBI released a ‘Concept Note‘ on CBDC to raise awareness about digital currencies in general and provide information about their intended characteristics.
Under the pilot project, banks have the freedom to select customers and merchants to try e-rupee through their mobile. They can initiate peer-to-peer as well as peer-to-merchant transactions. Initially, the digital rupee was introduced in cities like New Delhi, Bhubaneswar, Bengaluru and Mumbai. Now the extended cities include Guwahati, Hyderabad, Shimla, Gangtok, Indore, Lucknow, Patna, Ahmedabad and Chandigarh
The transaction of digital currency will be done through a wallet which works the same way as other payment wallets. First, the users deposit a certain amount in the digital wallet mobile application. They need to scan a QR code for payments. The receiver’s account will then show credited and the sender’s account will show debited.
