What is e rupee?

It is physical money in digital form and is India’s own CBDC – central bank digital currency. Just like how the Reserve Bank of India issues currency notes, it issues digital currency that can be stored in your mobile phone wallet. It is a legal tender, backed by the RBI. All rules applicable for printing of currency will be applicable to CBDC also. So, it’s just a different form of currency and not a currency itself.

What are the basic requirements to use e-Re?

Money in your bank account, an android mobile phone and digital rupee wallet app provided by your bank. e-Re is not supported by iPhone at present.

How to use the app?

In the first phase of pilot, only four banks — State Bank of India, ICICI Bank, YES Bank and IDFC First Bank —have been shortlisted to provide e-Re to their customers. If you are a customer of these banks having an android phone, you would have received a message and/or email from your bank asking you to use the digital currency. The communication from the bank will have a link to download the e-Re app. Once downloaded, mobile number verification (the only KYC process) is done and if the phone number is authenticated, the app gets downloaded. You can start using e-Re.  

Will customers automatically get a communication from banks regarding the app?

At present, the app is being piloted on a CUG or closed user group basis. This is because in the first phase of pilot, NPCI, which handles the back-end working of e-Re and RBI, which is responsible for the completeness of the transaction, are working towards spotting and remedying transactions-related snags. Banks are sending out messages to customers based on certain internal filtration parameters such as customers’ frequency of using the bank’s mobile app, making digital payments or transfers and so on.

However, if you are a customer of any of the four banks and you want to try out e-Re, you could reach out to your branch manager and make a request for an email which would allow you to download the app. But then, processing the request would be at the discretion of the bank.

How does it work

Once you’ve downloaded the app, you need to transfer (not link) money from your bank account to the digital wallet. Amount of any value can be transferred to the wallet, and you have the liberty to choose the denominations in which you want the money stored. For example, if you want to have ₹4,800 in the wallet, it could be split as one ₹2,000 note and the rest in ₹100 notes. Or all as ₹200 notes or even ₹50 and so on. It being a replica of physical currency, all physical denomination of coins and currency notes are available on the app. Payments to persons or individuals will happen app to app, while payments to merchants are QR-enabled. For those conversant with UPI, the process of making the payment is very similar. The app is also effective in guiding the steps. It doesn’t require the user to be tech-savvy.

Is the transfer an instant process?

Yes. Just like transacting with cash across the counter, as soon as you send money, the receiver will get it. The transaction, whether payment or receipt, will immediately reflect on the wallet. There are a few things to remember. The wallet is different from your bank account. Hence it doesn’t earn interest just like how cash in hand doesn’t earn money. If there is excess money in the wallet, it can be remitted back to your bank account. Likewise, since the digital wallet and your bank account are not linked, you don’t have to use the same back account each time you want to deposit into or withdraw from the wallet. However at the pilot phase, customers can load money into the wallet from any account, but for withdrawal, they should use the account of the bank from where the app was downloaded.

Where can it be used?

Everywhere. For now, whoever is part of the CUG, whether individuals or merchants, can use e-Re.

What are the main advantages of e rupee?

It is secure from counterfeit notes and theft. You don’t have to make the trip to ATM or your bank branch to withdraw money. Even if your mobile phone is lost, the amount in your digital wallet can be accessed and transferred to a new mobile number, though this may require interacting with the call centre. UPI, which is linked to a bank account, exposes you to the risk of your bank account being compromised if you misplace your phone. That risk is not there with e-Re.

Is e-Re free of payment failures?

Yes and no. Every transaction is tokenised and hence it is unique and secure. However, a token will not be generated if there is a snag in internet connectivity. The success of the transaction depends on the strength of internet connectivity and this is the main risk in the process. Since the debt or credit will instantly be reflected, the chances of payment failure seems negligible for now. However, only as the use cases and number of users increases will we get a better picture.