RBI Monetary Policy: UPI for cash deposit facility soon! RBI Guv Das announces more UPI initiatives

RBI Monetary Policy News: Soon, you will be able to deposit cash using Unified Payments Interface (UPI) in cash deposit machines.

At the monetary policy committee (MPC) press conference on Friday, Reserve Bank Governor Shaktikanta Das made an announcement in this regard. Das said there is a proposal to facilitate deposit of cash in cash deposit machines (CDMs) using UPI, a measure that will further enhance customer convenience and make the currency handling process at banks more efficient.

One can deposit cash into a specified bank account using cash deposit machines. As opposed to ATMs that only dispense cash, CDMs are enabled with cash deposit facility.

The RBI chief further said that deposit of cash through 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 informed.

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Commenting on the proposal, Fibe CoFounder and CFO Ashish Goyal said, “Regular rise in UPI transaction levels clearly indicates its popularity among users in India. Given the large scale acceptance of UPI, the move to enable UPI for cash deposit facilities will empower consumers with seamless deposit options but also present a promising opportunity for fintechs to leverage technology for the betterment of financial services.”

This initiative will enhance customer convenience by streamlining currency handling processes within banks, ensuring a more efficient and unified banking experience for customers, Goyal added.

Other UPI Initiatives

With regards to UPI access for prepaid payment instruments (PPIs) through third-party apps, Das said 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,” the RBI governor said.

At present, UPI payments from PPIs can be made only by using the web or mobile app provided by the PPI issuer.

“The proposal to allow UPI access for Prepaid Payment Instruments (PPIs) through third-party apps is a vital modification considering it provides customers the liberty to redefine their financial journey but also paves way for fintechs to innovate and provide more diverse, user-friendly solutions in the digital payments landscape,” Goyal said.

CBDC platform to handle multi-channel transactions

Das also mentioned in his statement about distribution of Central Bank Digital Currency (CBDC) through non-bank payment system operators.

The CBDC pilots are currently in operation with increasing number of use-cases and participating banks, he said adding that there is a proposal to make CBDC-Retail accessible to a broader segment of users by enabling non-bank payment system operators to offer CBDC wallets. “This will also facilitate testing of the resiliency of CBDC platform to handle multi-channel transactions.”

Meanwhile, the Reserve Bank announced its first bi-monthly monetary policy of the new financial year on Friday. The apex bank left the key interest rate or repo rate unchanged at 6.5 percent. The standing deposit facility (SDF) rate remained unchanged at 6.25 percent and the marginal standing facility (MSF) rate and the bank rate at 6.75 percent.