State Bank of India, BoB target 1 million user base in retail CBDC

With the Reserve Bank of India setting a plan to achieve 1 million daily transactions in the retail segment of central bank digital currency, large public sector banks have geared up their customer acquisition to achieve the regulator’s target. The regulator will meet banks that are participating in the retail pilot to gauge the progress made so far.

State Bank of India (SBI) – the country's largest lender, and Bank of Baroda, another large state-run lender, are aiming to scale up their user base to 1 million each from the existing 400,000 and 250,000 in their retail segment of the Central Bank Digital Currency (CBDC) pilot project.

“We have around 2.5 lakh users, and we are working to make 10 lakh users over the next 3-4 months,” Executive Director Joydeep Dutta Roy of Bank of Baroda said at the sidelines of a banking summit organised by the industry body FICCI and the Indian Banks Association.

Separately, Balaji Rajagopalan, SBI’s Chief Technology Officer, said that the target is to achieve 1,000,000 users by the end of December from the existing 400,000 users.

“The pilot has been a success. We have 400,000 CBDC users now as the largest bank in the country. The target is 1,000,000 users by December,” Rajagopalan added.

Rajagopalan said that SBI has onboarded around 40,000 merchants in the CBDC pilot since 1 December 2022. The bank has recorded over 900,000 transactions in the same period.

CBDC is a digital form of currency notes issued by a central bank. RBI broadly defines e-Rupee as the legal tender issued by a central bank in digital form.

The central bank had started the pilot on CBDC on the wholesale side from 1 November 2022, while the retail testing was started on 1 December. The RBI aims to increase the daily transaction volume of CBDC retail to 1 million by the end of 2023.

In September of this year, RBI Deputy Governor T Rabi Sankar had said that approximately 15,000 transactions were occurring daily in the pilot testing phase.

The central bank has invited banks to a meeting to discuss the progress in the CBDC pilot project.

“We have a meeting with RBI tomorrow (24 November) on CBDC pilot review," Roy said on the sidelines of a banking summit organised by the industry body FICCI and the Indian Banks Association.

Signalling a shift in focus towards enhancing transaction capabilities, the central bank implemented the interoperability of UPI and CBDC in July this year. This development enables customers to seamlessly transfer funds from a CBDC wallet or directly from a bank account using a unified QR code.