In a recent meeting, the Reserve Bank of India (RBI) introduced new proposals aimed at improving the ease of cash deposit and facilitating digital payments through Unified Payments Interface (UPI).
These initiatives, announced by RBI Governor Shaktikanta Das, seek to streamline banking operations and promote digital transactions.
FACILITATING CASH DEPOSITS THROUGH UPI
Traditionally, cash deposits in Cash Deposit Machines (CDMs) have relied on debit cards. However, leveraging the success of cardless cash withdrawals using UPI at ATMs, the RBI now proposes to extend this functionality to cash deposits in CDMs.
Governor Das highlighted that this initiative aims to enhance customer convenience and optimize currency handling processes within banks.
EMPOWERING UPI PAYMENTS THROUGH PPI WALLETS
Additionally, the RBI announced measures to enable UPI payments through Prepaid Payment Instruments (PPI) wallets via third-party UPI apps. Presently, UPI payments from PPIs are limited to the issuer’s web or mobile applications.
By permitting the use of third-party UPI apps, the RBI aims to enhance customer convenience and encourage the adoption of digital payments for small-value transactions.
IMPACT AND BENEFITS OF THE RBI ANNOUNCEMENT
Adhil Shetty, CEO of Bankbazaar.com, lauded the RBI’s decision, highlighting its positive implications for PPI holders.
By allowing PPIs to be linked through third-party UPI apps, individuals gain greater flexibility in conducting UPI transactions.
This advancement marks a significant step towards digital payment accessibility, empowering PPI holders to utilize UPI services akin to traditional bank account holders.
ENHANCING FINANCIAL INCLUSIVITY
The introduction of these measures signifies a strategic shift in the digital payment landscape, particularly for individuals utilizing prepaid payment instruments such as digital wallets.
With the ability to seamlessly access UPI services through any third-party app, wallet holders are no longer restricted to the issuer’s platform for UPI transactions.
This shift promotes financial inclusivity by providing individuals with diverse options for conducting digital transactions.
CONCLUSION ON CASH DEPOSIT THROUGH UPI
The RBI’s initiative to facilitate cash deposits through UPI and enable UPI payments via third-party apps reflects its commitment to fostering a digital-first economy.
By leveraging technological advancements and promoting interoperability in digital payment systems, these measures aim to enhance customer convenience, streamline banking processes, and drive the adoption of digital payments across India.