In a bid to shore up liquidity and add to user convenience along with boosting digital payment options, the Reserve Bank has now proposed to facilitate deposit of cash in Cash Deposit Machines (CDMs) using UPI. This measure is also expected to make the currency handling process in the banks a lot more efficient. Earlier cash deposits through CDMs were possible using debit cards.
The Governor reiterated that “given the experience gained from card-less cash withdrawal using UPI at the ATMs” it has now made the proposal to widen the ambit of transactions using UPI.
Responding to the RBI move, Arvinder Singh Nanda, Senior Vice President at Master Capital Services said, “Initiatives such as trading sovereign green bonds and facilitating cash deposits via UPI are expected to enhance market liquidity. Overall, the outlook post-policy appears balanced outcome for the equity market.”
Money transfer from wallets using UPI
But that is not all. Even in matters of money transfer from UPI apps, RBI is looking to boost the convenience factor. 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. But going forward, the RBI has “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.”
Dr. Manoranjan Sharma, Chief Economist at Infomerics Ratings believes that the Policy statement with these additions is “contextually appropriate, a justified Policy and communicated well. It is entirely in line with our expectations stemming from the evolving growth-inflation dynamics, the Monetary Policy Committee (MPC) of the RBI continued to be a withdrawal of accommodation. There are also measures relating to trading of Sovereign Green Bonds in International Financial Services Centre (IFSC), introduction of Mobile App, review of Liquidity Coverage Ratio (LCR) Framework, permission to Small Finance Banks (SFBs) to deal in Rupee Interest Rate Derivative products, enabling UPI for Cash Deposit Facility, UPI Access for Prepaid Payment Instruments (PPIs) through Third Party Apps and Distribution of Central Bank Digital Currency (CBDC) through Non-bank Payment System Operators.”