Banks will now incentivise customers if they use the central bank’s digital currency, the e-rupee, following a push from the Reserve Bank of India, reported news agency Reuters quoting three sources.
To incentivise e-rupee transactions, banks are offering a range of benefits, including cash-back rewards and points, akin to the rewards often associated with credit and debit card usage.
The RBI initiated a pilot program for the e-rupee in December and aims to achieve one million daily transactions by the end of the year. However, current retail transactions remain well below this target, averaging around 25,000 per day, prompting the central bank’s proactive efforts.
In an effort to attract users, the RBI has also introduced new features, such as linking the digital currency with India’s popular real-time payments system, the Unified Payment Interface (UPI), as reported by Reuters last month.
HDFC Bank, India’s largest private lender, has taken the lead in offering such incentives to stimulate e-rupee transactions.
Parag Rao, the country head for payments, liability products, consumer finance, and marketing at the bank, confirmed their efforts to expand the scale of e-rupee transactions without specifying the exact offers in place.
Smaller private banks like Yes Bank and IDFC First Bank are providing reward points that can be redeemed for travel bookings, mobile recharges, and cashbacks through the FastTag highway toll collection system, as disclosed by one of the three sources.
Additionally, other banks, including ICICI Bank and Union Bank, are reportedly planning to introduce similar incentives, according to executives at these respective banks.
These “time-bound promotional incentives” are an integral part of Yes Bank’s digital strategy, according to a bank spokesperson.
It’s worth noting that such incentives are generally considered “short-term measures” that can temporarily boost transaction volumes, a senior banker at a private bank told the news agency.
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Banks are unlikely to sustain these incentives for an extended period unless a viable long-term business proposition emerges, the person added.
