Banks will now reward customers if they use the central bank’s digital currency, the e-rupee, to a push from the Reserve Bank of India, as per report by news agency sources.
To incentivise e-rupee transactions, banks are offering a range of benefits, including cash-back rewards and points, after the rewards often associate with credit and debit card usage.
As RBI initiate a pilot program for the e-rupee in December and aims to achieve one million daily transactions by the end of the year.
But, current retail transactions remain well below this target, averaging around 25,000 per day, prompting the central bank’s proactive efforts.
In an effort to attract users, the RBI has also introduce new features, such as linking the digital currency with India’s popular real-time payments system, the Unified Payment Interface (UPI), as per reports.
HDFC Bank has taken the lead in offering such incentives to stimulate e-rupee transactions.
Same for private banks like Yes Bank and IDFC First Bank are providing reward points that can be redeem for travel bookings, mobile recharges, and cashbacks through the FastTag highway toll collection system, as disclose by one of the three sources.
Also, other banks, including ICICI Bank and Union Bank, are reportedly planning to introduce similar incentives, according to executives at these respective banks.
These “time-bound promotional incentives” are an integral part of Yes Bank’s digital strategy, as per a bank spokesperson.
It’s should be noted that such incentives are generally consider “short-term measures” that can temporarily boost transaction volumes.
Banks can sustain these incentives for an extended period unless a viable long-term business proposition emerges.
