RBI proposes cash deposits through UPI; widens digital currency for retail

Mumbai, Apr 5: The Reserve Bank of India has proposed cash deposit in banks through Unified Payment Interface (UPI) mechanism.

RBI has also proposed making UPI payments through Prepaid Payment Instruments (PPI) wallets.

Announcing the monetary policy outlook, RBI Governor Shaktikanta Das said, "Deposit of cash through Cash Deposit Machines (CDMs) is primarily being done through the use of debit cards. Given the experience gained from card-less cash withdrawal using UPI at the ATMs, it is now proposed to also facilitate deposit of cash in CDMs using UPI."

He said that the measure will enhance customer convenience and make the currency handling process at banks more efficient.

"At present, UPI payments from Prepaid Payment Instruments (PPIs) can be made only by using the web or mobile app provided by the PPI issuer. It is now proposed to permit the use of third-party UPI apps for making UPI payments from PPI wallets. This will further enhance customer convenience and boost adoption of digital payments for small value transactions," Das further said.

The RBI has also proposed making Central Bank Digital Currency (CBDC) accessible to broader sectors of customers by enabling non-bank payment system operators to offer CBDC wallets. CBDC pilots are currently in operation.