-By Jaspreet KalraThank you for reading this post, don't forget to subscribe!
MUMBAI (Reuters) – Indian banks are offering incentives to conduct transactions using the central bank digital currency, e-rupee, introduced by the Reserve Bank of India to boost volumes, three sources said.
He said the incentives range from cash-back to reward points, which are offered by banks on credit and debit cards.
The sources declined to be named because they were not authorized to speak to the media. RBI did not respond to an email seeking comment.
The RBI launched a pilot program for e-rupee in December and aims for one million transactions per day by the end of the year. But retail transactions are still running below target, averaging about 25,000 a day, prompting a push from the central bank, the first of three sources told Reuters.
The central bank also introduced new features to attract users, including linking the digital currency to India’s popular real-time payments system, the Unified Payments Interface (UPI), Reuters reported last month.
HDFC Bank, India’s largest private lender, has introduced such offers to expand the scale of such transactions, said Parag Rao, country head of payments, liability products, consumer finance and marketing at the bank.
Rao did not identify the specific proposals it was pursuing.
According to the second of the three sources, small private lenders Yes Bank and IDFC First Bank are offering reward points that can be redeemed for travel bookings, mobile recharges and cashback through the highway toll collection system FastTag.
Other banks, including ICICI Bank and Union Bank, are also expected to launch similar incentives, according to two officials of the respective banks.
A spokesperson for the bank said in an email response that such “timely promotional incentives” for CBDCs are part of Yes Bank’s digital strategy.
Emails sent to other banks were not responded to.
All three sources cited earlier said the banks themselves are financing the offers.
Globally, countries like Nigeria offer rewards such as discounts on auto-rickshaw rides for adopting their digital currency but with limited success.
A senior banker at a private lender said the incentives are largely “short-term measures” that will help boost volumes temporarily. However, banks will not offer such incentives for long unless there is a clear business proposition, this person said.
(Reporting by Jaspreet Kalra; Editing by Dhanya N Thoppil)