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 (MDR) is the rate or amount that a merchant pays to banks to enable them to accept payments by card.
Lenders such as Yes Bank, IDFC Bank, and ICICI Bank have already made the digital wallet available for download on the Google Play Store and Apple App Store. Several companies, such as Reliance Retail, Natural Ice Cream, and oil marketing companies, have also signed up to accept payments in eRupee.
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 further noted that while cash transactions are free, merchants do have to pay fees to cash-management companies for handling currency notes.