GG News Bureau
Mumbai, 5th April. In a significant move announced on Friday, the Reserve Bank of India (RBI) unveiled plans to introduce a cash deposit facility in banks using the widely-used Unified Payments Interface (UPI), a real-time payment system for inter-bank transactions via mobile phones.
Governor Shaktikanta Das, during the announcement of the first bi-monthly monetary policy of the current financial year, highlighted that the initiative aims to enhance customer convenience and reduce the cash-handling burden on bank branches. Currently, cash deposit machines (CDMs) require the use of debit cards for cash deposits.
“With the increasing popularity and acceptance of UPI, alongside the observed benefits of UPI-enabled card-less cash withdrawals at ATMs, we are proposing to introduce a cash deposit facility through UPI,” stated Governor Das.
Operational guidelines for this service are expected to be released shortly by the RBI.
Furthermore, the central bank intends to allow the linking of Prepaid Payment Instruments (PPIs) through third-party UPI applications, offering users greater flexibility. Presently, UPI payments from bank accounts can be executed by linking the bank account through the bank’s UPI app or using any third-party UPI application. However, this functionality is not available for PPIs, which currently require the issuer’s application for UPI transactions.
“To offer more flexibility to PPI holders, we are proposing to allow the linking of PPIs through third-party UPI applications. This will empower PPI holders to conduct UPI payments similar to bank account holders,” explained the RBI.
Instructions regarding these initiatives will be issued by the RBI shortly, marking a significant step towards enhancing digital payment ecosystems and fostering financial inclusivity in India.
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