RBI last year began trials using CBDCs, termed e-rupees, in both the wholesale and retail markets.
RBI aims to reach a target of one million CBDC transactions per day by the end of this year
Photo Credit: Twitter/ Ministry of Information and Broadcasting
The Reserve Bank of India (RBI) has called on a wider set of lenders to take part in pilot programmes using the central bank digital currency (CBDC) as it tries to increase transactions, three bankers told Reuters on Wednesday.
Nearly two dozen central banks across emerging and advanced economies are expected to have digital currencies in circulation by the end of the decade, the Bank for International Settlements (BIS) found in a survey, published on Monday.
Last year, the RBI began trials using CBDCs, termed e-rupees, in both the wholesale and retail markets.
Currently, large state-owned and private lenders, including State Bank of India, Bank of Baroda, ICICI Bank, HDFC Bank, Kotak Mahindra Bank and Yes Bank, are among those participating in the pilot project.
"The RBI has asked smaller banks to either tie up with fintech players or develop their systems to start CBDC pilots this year," said the technology head of a state-owned bank, who attended the meeting with RBI officials on Tuesday.
"We will now have to float tenders to get interested fintech partners on board and evaluate the costs involved. This process is expected to take about four-five months."
The bankers did not wish to be named as they were not authorised to speak to the media.
The RBI aims to reach a target of one million CBDC transactions per day by the end of this year, RBI deputy governor T Rabi Sankar said on Tuesday.
There were 1.3 million customers and 0.3 million merchants, who used CBDC as of June 2023, he said.
"By getting more banks to participate in the pilots, the RBI wants to see if there are any glitches in implementation and conduct pilots on a large user base," said another banker with a state-owned bank.
"We are in the advanced stage of submitting a CBDC pilot request to the RBI. We expect the approval to come in the next one-two months."
The central bank has also asked smaller banks to seek feedback from those currently conducting the pilots, the bankers said.
The RBI did not immediately respond to a Reuters' email seeking comment.
© Thomson Reuters 2023
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