RBI Introduces Programmability And Offline Functions In Retail e-Rupee Pilot

The Reserve Bank of India has introduced programmability and offline functionality in its central bank digital currency (retail) pilot.

Currently, the CBDC-R enables only person-to-person and person-to-merchant transactions using digital rupee wallets. However, the regulator will now introduce these additional use cases through pilots in a gradual manner, Governor Shaktikanta Das said in his monetary policy statement on Thursday.

Programmability will enable users, like government agencies, to ensure payments are made for defined benefits, Das said. Corporates will be able to programme specified expenditures, like business travel, for employees.

Apart from this, features like validity periods or geographical areas within which CDBC may be used, can also be programmed from now on.

The offline functionality in CBDC-R will enable transactions in areas with limited internet connectivity. For this, multiple offline solutions, both proximity- and non-proximity-based, will be tested across hilly rural and urban locations.

Das also introduced a principle-based framework for authentication of digital payment transactions.

Even though, to date, the RBI has not prescribed any particular additional factor for authentication, the payments ecosystem has largely adopted an SMS-based, one-time password.

To facilitate mechanisms for digital security, the RBI has proposed this principle-based framework. Instructions for it will be issued soon.

With regards to the Aadhaar Enabled Payments System, the RBI has proposed to streamline the onboarding process.

This would include mandatory due diligence for AePS touch-point operators, followed by banks. Even additional fraud risk management requirements will be considered, Das said.

India's Monetary Policy Committee kept the benchmark repo rate unchanged at 6.50% for the sixth straight meeting.