e-RUPI
Digital Payment:
To facilitate digital payments, the RBI
announced adjustments to "e-RUPI."
The Indian government has launched
"e-RUPI," an electronic voucher-based digital payment system, to
encourage the use of digital currency in India.
The RBI is now promoting its use.
The ceiling for e-RUPI vouchers has been
raised from Rs 10,000 to Rs 1 lakh.
One e-voucher could be used multiple
times until it was completely redeemed.
What
exactly is e-RUPI?
It is a person and a digital payment
solution with a defined purpose,
It functions as a digital medium for
cashless and contactless financial transactions.
A QR code or SMS string-based e-Voucher
will be sent to beneficiaries' mobile phones.
What
is the purpose of the e-voucher?
This voucher can be used without a credit
or debit card, a Smartphone app, or internet banking by e-RUPI users (at shops
or anywhere it is accepted).
It establishes a digital link between
service providers (government or private sector) and recipients without the
need for a physical interface.
The government can use this to deliver
services under various schemes such as the Ayushman Bharat Pradhan Mantri Jan
Arogya Yojana, which provides drugs and nutritional support to mothers and
children, TB eradication programmes, drugs and diagnostics under the scheme,
fertiliser subsidies, and so on.
This can be used by the private sector to
run CSR activities.
A company or government agency can
approach the bank issuing the e-voucher and offer information about the
individual to whom they want to make payments (both public and commercial
banks).
The e-voucher will be sent to that
recipient via their cell phone number.
Importance:
Taking the vision of good governance
forward
Ensures that benefits are delivered in a
leak-proof way to the intended recipients.
In the context of welfare programmer, it
restricts the number of touch points (interactions) between the government and
the recipient.
It allows the private sector to use
e-vouchers in employee benefit programmes and CSR efforts.
Allows for digital offline banking
(without the need for the internet).
The RBI is proposing to introduce a
central bank digital currency, which will provide an opportunity to identify
weaknesses in the digital payments infrastructure.
Identifying and filling holes ensures the
viability of future digital currencies.
Like virtual currency, it zeroes out
volatility (as e-RUPI is supported by the Indian rupee but not virtual
currency).
It
ensures on-time payments without the use of any intermediates.
On its Unified Payment Interface (UPI)
platform, the National Payments Corporation of India (NPCI) developed e-RUPI.
On what basis can it be said that digital
currencies will succeed in India?
Digital payments are becoming more widely
accepted in the country (though cash is still a preferred option).
The high currency-to-GDP ratio in India
The rise of highly volatile virtual
currencies such as Bitcoin
As a result, governments and central
banks must safeguard people's faith in a country's currency.
Is this a first-of-its-kind voucher-based
welfare system?
No, the United States has a system of
education vouchers that provides government money for a limited number of
students to receive an education and provides subsidies to their parents to
educate their children.
Colombia, Chile, Sweden, Hong Kong, and
other countries have similar mechanisms.
India's National Payments Corporation
(NPCI) :
An umbrella organization in India that
manages retail payment and settlement systems.
Constitutionality: As defined by Section
25 of the Companies Act 1956, the firm is a "not-for-profit" entity
(now Section 8 of the Companies Act 2013).
Under the provisions of the Payment and
Settlement Systems Act, 2007, the Reserve Bank of India (RBI) and the Indian
Banks' Association (IBA) launched the initiative.
The Immediate Payment Service (IMPS), the
National Financial Switch (NFS), the Cheque Truncation System (CTS), the
Unified Payments Interface (UPI), the Bharat Bill Payment System (BBPS), the
RuPay Credit Card, the National Common Mobility Card (NCMC), and the National
Electronic Toll Collection (NETC) are just a few of the services available.