Cash deposits at bank ATMs to go cardless with UPI apps, says RBI governor Shanktikanta Das

Reserve Bank of India Governor Shanktikanta Das announced in the first meeting of FY24–25 to allow third-party UPI apps for payments.

Livemint
Updated5 Apr 2024
Reserve Bank of India (RBI) Governor Shaktikanta Das announces the central bank's monetary policy statement, in Mumbai, Friday, April 5, 2024. (PTI Photo)
Reserve Bank of India (RBI) Governor Shaktikanta Das announces the central bank’s monetary policy statement, in Mumbai, Friday, April 5, 2024. (PTI Photo)

In its first bi-monthly committee meeting for FY24–25, Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday proposed to permit 3rd party UPI apps to make payments and cash deposits at Cash Deposit Machines (CDMs) using UPI (Unified Payments Interface). 

Addressing the RBI MPC meet 2024 today, Das said, “Deposit of cash through CDMs is primarily being done through debit cards. Given the experience gained from cardless cash withdrawal through the UPI at the ATMs, it is now proposed to facilitate the deposit of cash in CDMs using UPI.”

“This will enhance customer convenience, and make the currency-handling process at banks more efficient,” the RBI Governor added. 

Also Read | Live updates on RBI MPC meet 2024

Shivaji Thapliyal, Head of Research and Lead Analyst at Yes Securities said the announcement serves to make PPI wallets somewhat inter-operable and democratizes the Wallet market to that extent.

“It may be noted that, in FY23, Paytm Wallet had a GMV of USD 19.1bn, with Mobikwik being a distant second with USD 1.01 bn GMV. The RBI diktat had meant that the Paytm Wallet business would, effectively, close down,” he said. 

However, it would be interesting to see what scenarios could emerge if third-party UPI apps, which would include Paytm, were able to access other PPI wallets, Thapliyal said, adding that the noteworthy monitorable would include the commercials and the extent of adoption allowed by merchants on the ground.

The central bank also maintained the real GDP growth forecast for the current fiscal year at 7%. The GDP growth target for Q1 FY25 was adjusted to 7.1% from the previous 7.2%, while for Q2 FY25, it was revised to 6.9%, up from the previous forecast of 6.8%.

The growth rate for Q3 FY24 remains unchanged at 7% from previous forecasts. In the final quarter of the fiscal year, the RBI revised the growth rate to 7% from the previous 6.9%.

In the quarter ending December 2023, India's GDP growth rate reached 8.4%, significantly surpassing the RBI's projections. This reaffirms India's position as the fastest-growing major economy globally. According to NSO's second advanced estimate, India is projected to grow by 7.6% in FY24, an increase from 7.3% in FY23.

The RBI also maintained its benchmark interest rate (repo rate) at 6.5% following a three-day meeting. This marks the seventh consecutive occasion where the RBI has opted to keep rates stable.

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HomeEconomyCash deposits at bank ATMs to go cardless with UPI apps, says RBI governor Shanktikanta Das

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