Trial of retail e-rupee to start soon, says RBI Governor

The Reserve Bank of India (RBI) Governor, Shaktikanta Das said that RBI will follow up on the wholesale e-rupee pilot with a similar trial on the retail side this month.

He called the launch of the Central Bank Digital Currency (CBDC) as a landmark moment in the history of currencies in the country. He also said that it will change the way of doing business. CBDC has recently started on the wholesale front between a limited set of banks.

"The retail part of the CBDC trial will be launched later during this month. We will announce the date separately," he said, speaking at the annual FIBAC conference of bankers here.

The broader wish of the RBI is to execute a full-fledged launch of the CBDC "in the near future", Shaktikanta Das said, choosing not to share a timeline for the same.

"I don't want to give a target date by which time the CBDC will be launched in a full-scale manner because this is something where we have to proceed very carefully. This is the first time the world is doing it. We don't want to be in a great hurry," he said.

There will be some technological challenges, some process challenges and the RBI will want to iron out all those aspects and introduce the CBDC in a manner that is non-disruptive, he said.

also talked about the experience with the pilot project on digitisation of farm loans. He said that the RBI wishes to introduce the same for small businesses in 2023.

Learnings and experience of the end-to-end digital KCC (kisan credit card) loans pilot, currently in Madhya Pradesh and Tamil Nadu, would be internalised before extending the initiative for the small businesses, he said.

Shaktikanta Das said in the case of the end-to-end digital KCC loans, a bank processes data from the credit rating agencies, uses artificial intelligence to process satellite data to analyse a farmer's land and what was cultivated in that land in the previous years.

Das added that the process of documentation is also simple and the farmer needs to visit a bank branch a minimum number of times.

The RBI is working closely with banks on the initiative, he said, adding that banks also have to upgrade their technology infrastructure to make such a project happen.

Das also mentioned that other than Federal Bank and Central Bank of India, two more banks will soon start offering digital loans for farmers.

The Governor said the state governments need to completely digitise their land records and the process of verification of the title for the scheme to function smoothly.