RBI: Cash deposits through UPI &PPI through third party application, CBDC-Retail accessible to a broader segment

The Statement on Developmental and Regulatory Policies released by RBI today proposed to facilitate a cash deposit facility through the use of UPI. “Cash Deposit Machines (CDMs) deployed by banks enhance customer convenience while reducing the cash-handling load on bank branches. The facility of cash deposit is presently available only through the use of debit cards.

“Given the popularity and acceptance of UPI, as well as the benefits seen from the availability of UPI for cardless cash withdrawals at ATMs, it is now proposed to facilitate a cash deposit facility through the use of UPI. Operational instructions will be issued shortly”, the statement said.

Cash Deposit Machines (CDMs)are ATMs that allow bank customers to deposit cash directly into their bank account. They are a convenient way to deposit cash without visiting a bank during branch hours.

UPI access for Prepaid Payment Instruments (PPIs) through third-party applications:

Currently, savings accounts, overdraft accounts, prepaid wallets, and credit cards can be linked to UPI.UPI network also facilitates payments financed by credit from banks. Under this facility, payments through a pre-sanctioned credit line issued by a Scheduled Commercial Bank to individuals, with the prior consent of the individual customer, are enabled for transactions using the UPI System. UPI payments from bank accounts can be made by linking a bank account through the UPI App of the bank or using any third-party UPI application. However, PPIs can currently be used to make UPI transactions only by using the application provided by the PPI issuer. To provide more flexibility to PPI holders, it is now proposed to permit the linking of PPIs through third-party UPI applications. This will enable the PPI holders to make UPI payments like bank account holders. “Instructions in this regard will be issued shortly,” said the statement.

Distribution of CBDCs through Non-bank Payment System Operators:

The Reserve Bank of India proposed to make Central Bank Digital Currency (CBDC)-Retail accessible to a broader segment of users in a sustained manner, by enabling non-bank payment system operators to offer CBDC wallets. This is expected to enhance access and expand choices available to users apart from testing the resiliency of the CBDC platform to handle multi-channel transactions. “Necessary changes will be made to the system to facilitate this”.

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