Indian banks are actively promoting the adoption of the central bank digital currency (CBDC), digital-rupee, by offering a range of incentives to encourage users to conduct transactions with the national digital currency.
These incentives include cash-back rewards and reward points, Reuters reported citing sources close to the matter.
RBI Pushes Banks to Boost CBDC Transaction Volume
The initiative to promote the digital rupee or e-rupee comes in response to nudges from the Reserve Bank of India (RBI) to boost transaction volumes with the digital currency.
The RBI initiated a pilot program for the e-rupee in December with an ambitious target of achieving one million daily transactions by year-end.
However, as of now, retail transactions using the e-rupee remain below the intended target, averaging around 25,000 daily transactions.
To address this, the central bank is intensifying its efforts to increase adoption. To make the e-rupee more appealing to users, the RBI has introduced new features, including linking the digital currency to India’s popular real-time payments system, Unified Payment Interface (UPI), as reported earlier by CryptoNews.
Major Banks Offer Incentives to Push e-Rupee Adoption
Some of India’s major banks have embraced this push for e-rupee adoption by offering incentives.
The country’s largest private lender, HDFC Bank, is among those that have rolled out offers to stimulate e-rupee transactions. Specific details of these incentives have not been disclosed by the bank.
Smaller private banks like Yes Bank and IDFC First Bank are also participating in this endeavor by offering reward points that users can convert into various benefits, including travel bookings, mobile recharges, and cashbacks through the FastTag system, which is commonly used for highway toll collection.
Expectations are that more banks, including ICICI Bank and Union Bank, will introduce similar incentive programs in the near future to promote e-rupee transactions.
While these incentives are considered “time-bound promotional incentives” and are part of the digital strategy of banks like Yes Bank, their effectiveness is viewed as largely short-term.