RBI to Launch Pilot Project for QR Code-Based Coin Vending Machines Using UPI in 12 Cities

The Reserve Bank of India's Governor Shaktikanta Das said on Wednesday that the central bank would launch a pilot project on QR code-based coin vending machine (QCVM) in 12 cities in the country. These vending machines will dispense coins against debit to the customer's account using Unified Payments Interface (UPI) instead of physical tendering of banknotes.

"This will enhance the ease of accessibility to coins. Based on the learnings from the pilot, guidelines will be issued to banks to promote the distribution of coins using these machines," the governor said.

Addressing the outcome of the Monetary Policy outcome for calendar year 2023, the central bank's governor said that the RBI will launch the QR code-based coin vending machine to enhance ease of access to coins.

In a move that will raise borrowing costs for corporates and individuals even further, the RBI Monetary Policy Committee (MPC) led by Governor Shaktikanta Das hiked the repo rate by 25 basis points to 6.5 percent on Wednesday.

According to the governor, a rate hike of 25 basis points is considered as appropriate at the current juncture. "The reduction in the size of the rate hike provides the opportunity to evaluate the effects of the actions taken so far on the inflation outlook and on the economy at large," he added.

When high levels of inflation prevail, the central bank attempts to reduce the flow of money in the economy. One way to do this is by increasing the repo rate. With it, borrowing becomes a costly affair for businesses and industries, which in turn, slows down investment and money supply in the market.