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RBI launches ‘Digital Rupee – Retail segment (e₹-R)’ in Four Cities; Issues Rs 1.71cr

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e-Rupee RBI creates Rs 1.71 crore of digital currency for retail pilot - CopyOn December 1, 2022, the Reserve bank of India (RBI) launched its pilot on retail digital currency/ rupee called ‘Digital Rupee – Retail segment (e₹-R)’, a Central Bank Digital Currency (CBDC) which is an electronic form of sovereign currency.

  • In this regard, RBI issued Rs 1.71 crore to four participating banks based on their indents.

Pilot Coverage & Participating Banks:

i.In the retail pilot of the digital rupee, 8 banks have been identified for phase-wise participation in four cities of Mumbai (Maharashtra), New Delhi (Delhi), Bengaluru (Karnataka), and Bhubaneswar (Odisha).

  • It will cover select locations in closed user groups (CUG) which will include both the customers and merchants.

ii.In the first phase, four banks including State Bank of India (SBI), ICICI Bank, YES Bank, and IDFC First Bank will take part.

  • Four more banks viz. Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank will join this pilot subsequently.

iii.The pilot will later extended to Ahmedabad (Gujarat), Gangtok (Sikkim), Guwahati (Assam), Hyderabad (Telangana), Indore (Madhya Pradesh), Kochi (Kerala), Lucknow (Uttar Pradesh), Patna (Bihar), and Shimla (Himachal Pradesh).

What is e₹-R?

Retail digital rupee can provide access to safe money for payment and settlement as it is a direct liability of the RBI. It can be converted to other forms of money, like deposits with banks. The retail digital rupee will not earn any interest.

e₹-R Model:

i.RBI proposed a token-based two-tiered architecture model for e₹-R. In this, the person receiving a token will verify that his ownership of the token is genuine.

ii.RBI will issue and redeem e₹-R while the distribution and payment services will be delegated to the banks.

iii.The model is similar to the current physical currency management system wherein banks manage activities like distribution of notes to the public, account-keeping, adherence to requirements related to know-your-customer (KYC) and anti-money laundering and countering the terrorism of financing (AML/CFT) checks, transaction verification, etc.

iv.The e₹-R will be issued in the same denominations that paper currency and coins are currently issued.

  • Users will be able to transact with e₹-R through a digital wallet offered by the participating banks and stored on mobile phones or devices.

v.e₹-R for can be used for both person-to-person (P2P) and person-to-merchant (P2M) transactions.


The Central Government announced the launch of the digital rupee FY2022-23 onwards in the Union Budget 2022. CBDC is aimed to complement rather than replace current forms of money.

Recent Related News:

i.On 2nd September 2022, RBI launched the pilot for end-to-end digitalization of Kisan Credit Card (KCC) lending. The project was developed by the Reserve Bank Innovation Hub (RBIH) in association with RBI.

ii.RBI decided to allow foreign inward remittances received under the Rupee Drawing Arrangement (RDA), to be transferred to the KYC (Know Your Customer) compliant bank account of the biller (beneficiary) through Bharat Bill Payment System (BBPS), subject to the conditions. Thus, it has allowed BBPS to process Cross-Border Inbound Remittances.

About Reserve Bank of India (RBI):

Established– 1st April 1935
Headquarters– Mumbai, Maharashtra
Governor– Shaktikanta Das
Deputy Governors– Mahesh Kumar Jain, Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar