RBI's announcement on e-RUPI: BCT Digital

10 Feb 2022 , 02:04 PM

Enhancing the e-RUPI system, as announced in today’s RBI policy meet is a welcome move. The government-sponsored, secure “gift card” program was launched with good intentions but with limited scope (One time use only and cap of Rs10,000). Given that an important aim of this system is efficient direct benefit transfers to citizens, the payment system needed to be more expansive. With a higher limit and allowing multiple transactions (say, Rs1,200 transaction at a hospital, followed by Rs20,000 fertilizer subsidy and Rs15,000 e-vehicle subsidy), today’s announcement hints at a larger role of the e-RUPI system in the economy.

This will (i) reduce leakage of funds in welfare schemes, and (ii) help banks gather customer data that can be used for financial inclusion as well as cross-selling of products to existing customers.

The author of this article is Jaya Vaidhyanathan, CEO, BCT Digital

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