E-RUPEE RETAIL -GAME CHANGER.

 After launching digital rupee in wholesale among selected banks on November 1st the retail version of CBDC was followed on December 1st 2022.Initially four banks-SBI, ICICI Bank IDFC First Bank and YES Bank- are participating in the selected four cities namely New Delhi, Mumbai, Bengaluru and Bhubaneswar as  the first Phase of the retail pilot project.  Subsequently 4 more banks will be  added to cover 13 cities in a phased manner, experimenting  on closed user groups(CUG).The aim is to test the efficacy of Digital Currency which is a digital extension of physical rupee. The retail version of e-Re can be used by individuals for all transactions, where they use cash to purchase things, repay debts etc. However in the beginning the uses will be limited to Closed User Groups (CUG) consisting of selected banks, consumers and priority is given to electronic version of cash  to retail transactions potentially available for the use by all - private sector, non financial consumers and businesses .E rupee provide access to safe money for payment and settlement without any scope for fraud. Payments to merchants can be  made using QR codes. While there are no specific transactions limits in value or volume terms, in the initial phase e-Rupee may be limited to low ticket usages.

Under e-rupee instead of physical Wallets cash will be consumed through digital Wallets transacting e-rupee that would bear the sovereign stamp. E rupee would be  a push product during the pilot phase. Banks would send out a link to identified customers through an email or text  message, whereby the e- rupee app could be  downloaded. Using the mobile number, the customer verification or KYC would be conducted and after the successful completion of KYC the digital wallet is ready to use.The user will be able to transfer money from the bank account to the digital wallet. In effect instead of withdrawing money from ATM it is transferred to the e wallet. The amount transferred would assume the exact denominations of  physical cash and will not earn interest when parked in the e- wallet. Accordingly the interest in e-rupee is largely determined by how much non interest generating money would be the user is  willing to accommodate. That is the vital factor determining the acceptance of e-rupee. However like physical currency it can also be transferred and deposited in a bank.

As mentioned earlier RBI's interest in CBDC stems from the fact  that the cost incurred in printing, transportation and storing of  physical currencies and coins can be minimised and rationalized with the introduction of CBDC.With larger use the Government  also envisaged better financial inclusion and formalizing digital consumption of money..E rupee is  also targeted to those who don't have a bank account, but can use digital currencies like a prepaid mobile recharge card.Similarly not only smart phone users but also every person with a mobile phone can use e- rupee wallet. 

E rupee pilot projects are launched to test the robustness of the entire process of a digital rupee creation, distribution and retail use in real-time. The advantages claimed are reduction in operation costs, fostering financial inclusion, bringing resilience, efficiency and innovation in the payment system. As far as consumers are concerned already  internet banking ATM card, UPI -gogglepay,paytm BNPL etc. established ease of transactions. Currently E- rupee needs to establish that it is equally if not more user-friendly and backed by appropriate technology and sound data and privacy provisions to attract more customers. Users must be adequately guarded against malpractices like digital theft,hacking and virus attacks. Though possibility is remote authorities must beware of and cautious against AIIMS type hacking especially when RBI is outsourcing fintech innovations. In any case retail digital rupee is a game changer with durable effects that would ensure better monetary transmission at least cost.