RBI makes cash deposits possible using UPI: Here's how
What's the story
The Reserve Bank of India (RBI) has launched a new feature allowing customers to deposit cash into their bank accounts using the Unified Payments Interface (UPI) at cash deposit machines (CDMs).
The feature was revealed today by RBI Governor Shaktikanta Das during the RBI's Monetary Policy Committee's policy announcement.
Previously, customers primarily used debit cards for cash deposits through CDMs.
CDM operations
Understanding the functionality of cash deposit machines
CDMs function like ATMs, providing a platform for customers to deposit cash directly into their accounts. Unlike ATMs that dispense cash, CDMs accept it.
The machine is equipped with a slot that scans the debit card and another one that counts the deposited cash through sensors.
Once the amount is confirmed, it is transferred to the customer's bank account.
Even now though, customers can deposit cash without a debit card by inputting their bank account number and registered mobile number.
Information
Guidelines for UPI-based cash deposits to be issued soon
The RBI highlighted the importance of CDMs in enhancing customer convenience and reducing the pressure of cash-handling on bank branches. Guidelines for implementing the UPI facility, which will allow customers to deposit cash using UPI, are expected to be issued shortly.
Digital payments
RBI proposes UPI access for prepaid payment instruments
In addition to the UPI feature for CDMs, Das announced plans to enable UPI access for Prepaid Payment Instruments (PPIs) via third-party apps.
Currently, UPI payments from PPIs can only be made using the web or mobile app provided by the PPI issuer.
The proposed change will allow the use of third-party UPI apps to make payments from PPI wallets, further enhancing customer convenience and promoting digital payments for small-value transactions.