Central Bank Digital Currency in India: Implications of the e-Rupee for Banking Operations and Payment Systems

Abstract

The design of Central Bank Digital Currency (CBDC) represents a structural shift in the architecture of modern payment systems. In India, the Reserve Bank of India (RBI) launched the digital rupee (e‑Rupee) with the objective of reducing transaction costs, enhancing payment efficiency and strengthening monetary transmission, and supporting financial inclusion. This paper examines the impact of the e‑Rupee on the Indian banking system and payment ecosystem. Using a conceptual–analytical approach supported by secondary data, policy documents, and early pilot observations, the study evaluates implications for banks, payment intermediaries, consumers, and regulators. The paper finds that while the e‑Rupee has the capability to improve payment security, settlement efficiency, and resilience, it also raises concerns regarding bank disintermediation, data privacy, and operational readiness. The study concludes that the success of the e‑Rupee will depend on careful design choices, phased implementation, and coordination between the RBI, banks, and fintech firms.