CBDC big update: Soon use RBI’s Digital Rupee for offline transactions

India Business News: NEW DELHI: In an ambitious target for e-rupee payments, the RBI is looking to boost daily central bank digital currency (CBDC) transactions to 10 lakh.

RBI Digital Currency: Union Bank of India aims to adopt Reserve Bank of India's digital rupee for employee benefit schemes, encouraging CBDC wallet transactions among staff members. Initially, the bank plans to credit specific allowances directly to the digital wallet, yet encounters resistance from some employees, prompting a protest from the All India Union Bank Employees Federation. They advocate for management to consult staff before enforcing this initiative.

An internal Reserve Bank of India (RBI) working group has been exploring the best technology path to develop a roadmap for such direct transactions between two countries.

RBI piloted Central Bank Digital Currency, or e-rupee, last November and now hopes to ramp up its use through UPI. But experts say lack of awareness and adoption are obstacles.

Banks in India are set to establish a common website to promote digital currency transactions and increase awareness of its adoption. The Reserve Bank of India has requested lenders to explore creating a platform to onboard customers and promote e-rupee. The proposed website is expected to have around 500,000 hits per month, potentially doubling by the end of the first year of operations. The website may be set up through the Indian Banks' Association (IBA).

The Reserve Bank of India is targeting one million transactions per day through the central bank digital currency (CBDC) by the end of this year, a top Reserve Bank of India (RBI) official said on Tuesday.

The phenomenon of bank notes in circulation going up even as digital payments soar is not new or unique to India and has been observed since 2007 for several nations.

But likely intervention from the Reserve Bank of India (RBI) capped further losses, traders said. The RBI likely sold U.S. dollars near 83.28 levels but the intervention was not aggressive, a foreign exchange trader at a private bank said.

The Reserve Bank of India (RBI) is expected to raise its main interest rate by 25 basis points on 6 April, and then pause for the rest of the year, according to economists. Inflation in India has been above the central bank's upper limit of 6% for two consecutive months, and that is expected to be the main cause of the next rate rise. Of the 62 economists polled, 49 predicted a rise in the repo rate to 6.75% at the meeting next week.

India's central bank sets guidelines for SROs including grievance redressal mechanisms, non-discriminatory fees, and adherence to regulatory standards to ensure fair and transparent operations in various sectors.