SBI, ICICI, IDFC, HDFC in RBI’s list for digital currency pilot

State Bank of India, ICICI Bank, IDFC First Bank and HDFC Bank are among a shortlist of at least five lenders that the Reserve Bank of India (RBI) has roped in to work on the retail pilot project of the central bank digital currency (CBDC), people familiar with the matter told ET.

The Reserve Bank is deliberating on whether retail CBDC (also known as CBDC-R) should be interoperable with the current digital payments system or a new framework should be built. The pilot for the retail digital rupee is expected to go live soon.

“Five banks have been shortlisted to run the pilot along with the help of NPCI (National Payments Corporation of India) and RBI. Some customer and merchant accounts will be chosen to roll out the retail digital rupee pilot soon,” said one of the persons.

‘Two Schools of Thought’

Unlike the use of the CBDC in the wholesale market-that pilot has already begun – “the full-fledged rollout of the retail CBDC has the potential to change the way we make payments”.

More banks could be added to the retail pilot project, said the people cited above.

The RBI and banks mentioned above didn’t respond to an email seeking comment.

The central bank is said to be weighing anonymity for small-value retail payments up to Rs 50,000, replacing cash. “Reasonable anonymity for small-value transactions akin to anonymity associated with physical cash may be a desirable option for CBDC-R,” the RBI had said in its CBDC concept note published last month.


The central bank is also considering whether to make current QR codes and the Unified Payments Interface (UPI) platform interoperable with CBDC-R, according to the people cited above.

“There are two schools of thought within the RBI – one which wants an entire new system for transacting CBDCs, while the other wants it to be interoperable with all the current modes of payment,” said a banker involved in the process. “We will have to see what the RBI eventually decides.”

The CBDC is aimed at reducing the dependence on cash as it still forms nearly 80% of the overall retail transactions in the economy, he added. Last month, the RBI became one of the first major central banks in the world to start a pilot project with its own virtual currency, using the wholesale digital rupee on a trial basis for settlement of transactions in government securities.

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