Indian Banks Up The Digital Currency Game By Offering Incentives To Users

The Reserve Bank of India (RBI) is among the banks in India looking to rapidly increase the country’s digital currency trading volumes and promote the use of Central Bank Digital Currency (CBDC) e-rupee.

Incentives such as cashback along with reward points are being used by Indian banks to promote the usage of digital currencies as a mode of payment within the country, Reuters reported as cited by sources.

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Imitating the credit/debit card strategy by banks, RBI took the step of having incentives such as retail transactions within the country remaining at 25,000 daily, which was much lower than the desirable target set.

RBI drafted an initial pilot program for e-rupee in December 2022 in cooperation with nine banks for ramping up digital transactions and achieving 1 million daily transactions. The banks included in the list are: the State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank Ltd., Kotak Mahindra Bank, Yes Bank, IDFC First Bank and the Indian unit of HSBC Holdings Plc.

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Initiatives By Banks: Parag Rao, HDFC's country head for payments, liability products, consumer finance and markets, indicated the bank would roll out offers leading to the expansion of transactions involving digital currency. Smaller private banks such as Yes Bank and IDFC First Bank also plan to look at offering reward points which can be later en-cashed for travel bookings, mobile recharges and highway-related taxes.

ICICI Bank and Union Bank are also looking at offering similar benefits to attract users to utilize digital currency as a payment method.

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