The Indian Central Bank Digital Currency (CBDC) eRupee cannot be converted directly to cash.
While addressing an event at the Indian Merchants’ Chamber, Anuj Ranjan, chief general manager at the RBI’s fintech department, said that the RBI will only issue eRupee for bank deposits and permit conversion of digital currency into cash for “now.”
RBI launched the eRupee last year to act as a legal tender. The Digital Rupee will act as a “liability” on the RBI’s balance sheet. Anuj Ranjan said that the central bank, RBI, will be responsible for the expenses related to the eRupee.
He further added that, “RBI will take care of the infrastructure as this is a public good. The issue of MDR will not be there.” The merchant discount rate, also known as MDR, is the fee or percentage merchants pay to financial institutions to enable them to accept card payments.
Yes Bank, IDFC Bank and ICICI Bank have made the digital e-wallet available for download on the Google Play Store and Apple App Store. Additionally, companies like Reliance Retail, Natural Ice Cream and oil marketing firms have agreed to accept eRupee payments.
Speaking at the event, Ajay Rajan, country head for transaction banking at Yes Bank, said that “The installation of the digital wallet can be done only by customers of the bank as we have restricted the app to SIM numbers that are registered with the bank by customers.” However, once it is installed, customers can add digital rupees to the wallet from any bank.
He added that while there are no fees associated with cash transactions, merchants do incur costs with cash-management companies for the handling and management of physical currency.