Indian banks are offering users incentives to drive the adoption of the country’s central bank digital currency, the e-Rupee. According to a report by Reuters, the incentivising campaign is led by the country’s central bank, the Reserve Bank of India (RBI) to boost digital currency volumes. Under this scheme, banks will offer users rewards for conducting transactions with the e-Rupee.
The report claims that the rewards range from cash-backs to reward points and will be similar to those offered by the banks on credit and debit cards. RBI is yet to offer an official comment on the digital rupee adoption drive.
Banks rolling out e-Rupee incentives
Parag Rao, country head for payments, liability products, consumer finance and marketing at HDFC Bank confirmed that India’s largest private lender has already rolled out such offers to expand the scale of digital rupee transactions. However, he didn’t share details about the specific offers the bank is currently running.
Smaller private lenders like Yes Bank and IDFC First Bank are also offering reward points. These points can be encashed for travel bookings, mobile recharges and via the highway toll collection system FastTag. A Yes Bank spokesperson also said that such “time-bound promotional incentives,” for the CBDC are part of the bank’s digital strategy.
Executives at ICICI Bank and Union Bank have also confirmed that their respective banks are also expected to roll out similar rewards. The report notes that the banks are funding the offers themselves.
What is e-Rupee
In December 2022, RBI started a pilot program for the e-Rupee. The central bank is targeting a million digital rupee transactions daily by the end of 2023. Averaging around 25,000 a day, retail transactions are still way behind the target, the report notes. The low volume might have forced RBI to start this adoption.
To attract users, the central bank also introduced new features for the e-rupee last month. This includes linking the digital currency to India’s popular real-time payments system, Unified Payment Interface (UPI).
Other countries like Nigeria also offer rewards like discounts on auto-rickshaw rides to increase the adoption of their digital currency. However, these incentives saw limited success in the country.
A senior banker said that the incentives are largely “short-term measures,” that will help drive volumes up temporarily. He also mentioned that banks won’t keep offering such incentives for long unless there is a clear business proposition.
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