- Date : 30/11/2022
- Read: 3 mins
Guide to Digital Rupee
As digitization becomes the norm of the modern world, the Reserve Bank of India (RBI) is leaving no stone unturned in making the Indian financial landscape digital. In its latest move, the apex body introduced the Digital Rupee or e-rupee, which will become functional from 1st December 2022.
Let’s understand what the Digital Rupee is all about and how it will work.
Digital Rupee – the concept
Digital Rupee is the digitized version of the Indian currency. It is a digital token representing legal tender. The e-rupee will be issued in similar denominations as the current rupee and coins.
Application of Digital Rupee
When introducing the e-rupee, RBI also explained its working. It stated that the token would be distributed to individuals and businesses through banks and other financial intermediaries. The bank or intermediary will also offer a digital wallet through which users can use the Digital Rupee. The wallet can be downloaded and stored on mobile phones and other connected devices.
Users will be able to transact using e-rupee. Person to Person (P2P) and Person to Merchant (P2M) transactions will be supported. Similar to other online transactions, users can make payments by scanning the QR codes.
The e-rupee will be an accepted legal tender with security, safety and finality of settlement, just like the INR. Users can also convert the e-rupee into other monetary forms like savings and bank deposits.
The rollout of the Digital Rupee
The RBI is rolling out the e-rupee in phases, the latest being the pilot. It has partnered with four leading banks for the same. These banks are as follows –
- ICICI Bank
- IDFC First Bank
- Yes Bank
The rollout will initially happen in the following four cities –
- New Delhi
Later, other banks will join the ecosystem, and more cities will come under the ambit of the Digital Rupee. The proposed banks and cities are as follows –
Gradually, RBI eyes to cover the whole of India by including different banks in the fray.
The bottom line
The financial ecosystem is gradually changing, and so is the legally accepted mode of tender. With the launch of the e-rupee, India will become a digitised nation progressing to a new way of life. So, understand what the Digital Rupee is all about and how it works so that you will know how to use it when it is introduced in your city.