Indian Banks Offer Incentives to Boost E-Rupee Transactions

Incentives include cashbacks and reward points, as the country’s largest banks like HDFC, ICICI and Union Bank aim to increase daily transactions from current 25,000 to 1 million, using RBI-backed e-rupee.

• The Reserve Bank of India (RBI) has instigated the incentive scheme, promoting the use of Central Bank Digital Currency (CBDC), the e-rupee, and aiming to lift the number of daily transactions from 25,000 to a target of 1 million.
• Indian banks, including HDFC, ICICI, Union Bank, and others, are offering incentives such as cashbacks and reward points, imitating strategies used for credit and debit card transactions.
• A pilot program for the e-rupee was launched in December 2022 by RBI in cooperation with nine banks, including major ones like State Bank of India, Bank of Baroda, HDFC, ICICI, and others, with the goal of driving up digital transactions.
• Smaller private banks like Yes Bank and IDFC First Bank are planning to offer reward points that can be converted into benefits such as travel bookings, mobile recharges, and highway toll-related taxes.
• The incentives are seen as temporary measures to drive volume, with banks to review such promotions unless they see a clear business advantage.

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