Cash deposit facility in banks through use of UPI soon: RBI

Cash deposit facility in banks through use of UPI soon: RBI

Mangalore Today News Network

New Delhi, April 5, 2024: In a significant move, the Reserve Bank announced on Friday its intention to enable cash deposits in banks via the widely-used UPI, an instantaneous real-time payment system for inter-bank transactions on mobile devices.

Furthermore, the central bank has agreed to allow the integration of Prepaid Payment Instruments (PPIs) with third-party Unified Payments Interface (UPI) applications.

During the announcement of the first bi-monthly monetary policy for the ongoing fiscal year, RBI Governor Shaktikanta Das highlighted the customer convenience and reduction in cash-handling burden on bank branches brought about by the deployment of cash deposit machines (CDMs) by banks.

Currently, the option to deposit cash is only available through debit cards.

"Considering the widespread adoption and utility of UPI, along with the observed advantages of UPI-enabled card-less cash withdrawals at ATMs, we propose to extend the facility to enable cash deposits through UPI," stated Das.

Operational guidelines for this will be released shortly, as confirmed by the RBI.

Additionally, the RBI aims to allow the linkage of PPIs with third-party UPI applications to offer users greater flexibility.

Presently, UPI payments from bank accounts are possible by linking the bank account with either the bank’s UPI app or any third-party UPI application. However, this flexibility is not extended to PPIs.

PPIs currently require the usage of the issuer’s application for UPI transactions.

"To enhance flexibility for PPI holders, we plan to authorize the linking of PPIs through third-party UPI applications, enabling PPI holders to make UPI payments akin to bank account holders," the RBI stated.