RBI increased the cap on per e-Rupi voucher issued by government to ₹1 lakh from ₹10,000

MUMBAI : The increase in the e-Rupi voucher cap to ₹1 lakh will boost digital payments in the offline mode and allow direct benefit transfers without having to have a bank account, experts said.

On Thursday, the Reserve Bank of India (RBI) increased the cap on e-Rupi vouchers issued by the government to ₹1 lakh per voucher from ₹10,000 and allowed one voucher to be used multiple times until fully redeemed.

Launched in August 2021 as a cashless payment product, e-Rupi vouchers allow users to redeem them without a card, digital payments app or internet banking access at select merchants.

“It will ensure better digital delivery of benefits of the central and state government schemes to the beneficiaries. Hence, it is likely to play a major role in strengthening direct benefit transfer (DBT) to citizens at the last mile, making it more transparent," said Anand Kumar Bajaj, co-founder, managing director and chief executive of PayNearby.

Bajaj said unlike other digital payment formats, e-Rupi does not require beneficiaries to have a bank account.

Another advantage is that it works on basic phones and can be used by people who do not own smartphones or are in places that don’t have an internet connection, thereby promoting offline payments.

In January, RBI released its “framework for facilitating small value digital payments in offline mode", following pilot testing from September 2020 to July 2021. On 6 August 2021, RBI permitted a pilot scheme to encourage technological innovations that enable small value digital transactions done offline.

Experts said that in addition to vouchers issued by the government, extending this new cap to other business-to-consumer use-cases should also be considered by improving the acquiring infrastructure for e-Rupi and integrating it with existing point of sale (PoS) systems.

“This will also encourage its use by private corporates and for other customer segments as well, such as larger value corporate gifting, transit/payroll/student cards, forex travel cards, among others. e-Rupi’s key benefit for governments is in enabling penetration among the unbanked and feature phone users, allowing issue without needing the recipient’s bank account or KYC," said Reeju Datta, co-founder, Cashfree Payments.

Others said there could be some future linkages between the e-Rupi and the proposed digital currency slated to be issued in fiscal 2023.

According to Dinesh Khara, chairman, SBI, hiking the cap could facilitate faster adoption of digital transactions, which could eventually usher in a roll-out of the digital rupee.

RBI will start issuing the digital currency in fiscal 2023, finance minister Nirmala Sitharaman announced in the budget, a move that the government believes would give an impetus to the digital economy.

The government proposes to amend the RBI Act to include the central bank digital currency (CBDC) alongside traditional banknotes. In October, it received a proposal from RBI to amend the Act and enhance the scope of the definition of ‘bank note’ to include currency in digital form.

Additionally, the e-Rupi would also interest the private sector and micro, small and medium enterprises (MSMEs) to deliver employee benefits besides exploring a wide range of business-to-business transactions, said Mandar Agashe, managing director and vice-chairman of Sarvatra Technologies Ltd.

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