e-Rupi,  a Cashless Mechanism

The Reserve Bank of India (RBI) on December 1 launched the Central Bank Digital Currency (CBDC) — digital rupee or e-rupi, a cashless and contactless mechanism mainly for retail payments.   


Right now if one has to transfer money over UPI, one has to make a request and forward it to the bank concerned. The bank then decides to deduct the balance and transfer it to the beneficiary account. In the background, banks also trigger an elaborate clearing and settlement process to make sure everybody gets paid what they’re owed and not a penny more. As such, a chain of intermediaries are seen here. 

With e – rupi, no intermediaries are present. One could simply transfer digital money from one’s wallet to another wallet (belonging to an individual or a merchant) just as handing them physical cash. The transaction is final. The settlement is final and one may not even need an internet connection.

The e-rupee will be in the form of a digital token representing a claim on the central bank, and will effectively function as the digital equivalent of a banknote that can be transferred electronically from one holder to another. A token CBDC is a “bearer-instrument” like a banknote, meaning whoever ‘holds’ the tokens at a given point in time will be presumed to own them.

This contactless e-RUPI is easy, safe and secure as it keeps the details of the beneficiaries completely confidential. The entire transaction process through this voucher is relatively faster and at the same time reliable, as the required amount is already stored in the voucher.


Now launched initially in New Delhi, Mumbai, Bengaluru and Bhubaneswar, it would be later extended to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla.

As of now, select customers from the selected cities will get CBDC wallets with notes printed digitally with the RBI Governor’s signature.


Eight banks will participate in the pilot — the State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in the first phase in the first four cities, and subsequently, Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank.


  • Contactless – Beneficiary should not carry a print out of the voucher
  • Easy redemption – 2 step redemption process
  • Safe and Secure – Beneficiary doesn’t need to share personal details while redemption hence privacy is maintained
  • No digital or bank presence required – Consumer redeeming the voucher need not have a digital payment app or a bank account


  • Corporates can enable well-being of their employees
  • End to end digital transaction and doesn’t require any physical issuance hence leading to cost reduction
  • Voucher redemption can be tracked by the issuer
  • Quick, safe & contactless voucher distribution


  • Easy & Secure – Voucher is authorized via a verification code
  • Hassle free & Contactless payment collection – Handling of cash or cards is not required
  • Quick redemption process – The voucher can be redeemed in a few steps and lesser decline due to pre-blocked amount


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