MUMBAI : The Reserve Bank of India (RBI) has not been maintaining daily and monthly transaction records for its e-rupee digital currency pilots, the central bank said in response to Mint’s Right to Information (RTI) application. However, a senior regulatory official had recently pegged daily retail usage volumes at 15,000.
Mint had sought daily and monthly data on the number of retail and wholesale transactions for the central bank digital currency (CBDC). According to a concept note released in October 2022, the digital currency, though not significantly different from banknotes, is expected to offer advantages in terms of being more convenient, quicker and cost-effective.
RBI’s central public information officer and deputy general manager Brijesh Baisakhiyar said in a reply that data is available with the banks and it would take a disproportionate amount of the regulator’s time to compile it. “Compilation of the information would engage the resources of the Bank in (a) disproportionate manner in terms of Section 7(9) of the Right to Information Act, 2005,” said Baisakhiyar.
According to the existing arrangement, data sets including for credit, deposit, and bad loans, are reported by banks to RBI, which then consolidates and releases relevant data for public consumption.
On 1 December, RBI launched a pilot for retail digital rupee (e ₹) with four banks in four cities, a month after testing the wholesale central bank digital currency (CBDC). The pilot, governor Shaktikanta Das had said in September, is currently being operated through 13 banks across 26 cities. Around 1.46 million users and 0.31 million merchants were part of the pilot as on 31 August.
The Financial Express reported on 15 September that RBI’s deputy governor T. Rabi Sankar said banks are seeing 15,000 retail transactions daily via CBDC. RBI has set an aggressive target of achieving one million CBDC transactions by the end of the calendar year.
An email query sent to RBI did not elicit any response till press time.
A former RBI executive said given that one of the objectives of a digital currency is to largely mimic physical cash, maintaining anonymity of transactions gains significance. Therefore, the central bank might not design a system that captures a lot of data and if the data on usage is not captured, the question of sharing may not arise.
Besides, RBI might only have credit and debit data from the banks without specific sender and receiver details in the case of CBDC, he said. “However, that should not stop RBI from sharing consolidated data on the transaction volumes. The point of a pilot is not to collect data but to set the ground and prepare the ecosystem,” he added.
In December, Sankar had said the RBI was also exploring technological solutions to ensure CBDC transactions remain anonymous. Despite declining to share transaction data, RBI recently disclosed data on e-rupee circulation. As of 31 March, CBDCs worth ₹16.39 crore was in circulation, including ₹10.69 crore under wholesale and the rest for retail.
Experts said though anonymity was promised by RBI, so far there is no clarity on how it will be achieved. “The volume of transactions is quite low and sharing the aggregate number does not impede anonymity. RBI may genuinely not have ready data on the volume of transactions since it may not have prepared a reporting format for the banks to share those numbers,” said Mihir Gandhi, payments transformation leader, PwC India.
Gandhi also does not expect a pick-up in retail CBDC use without incentives. Most people won’t opt for an additional layer in their transactions, like transferring to a wallet before spending, especially when unified payments interface (UPI) allows direct transfers from bank accounts.
“Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!” Click here!
Download The Mint News App to get Daily Market Updates.
Updated: 17 Oct 2023, 10:55 PM IST
