The Reserve Bank of India (RBI) launched a pilot of the retail CBDC in December 2022, and achieved the target of having 10 lakh transactions a day in December 2023. Now, RBI has said that Digital rupee users will soon be able to execute transactions in areas with limited internet connectivity.
According to a report by the news agency PTI, RBI governor Shaktikanta Das has announced that offline capability will be introduced on the Central bank digital currency (CBDC) pilot project.He noted that programmability-based additional use cases will also be introduced as part of the pilot project.
It is important to note that other payment platforms, like the popular Unified Payments Interface (UPI), already offer offline services.

What RBI governor has to say

“It is proposed to introduce an offline functionality in CBDC-R (Retail) for enabling transactions in areas with poor or limited internet connectivity,” said Das while announcing the bi-monthly monetary policy review.
For this purpose, multiple offline solutions, which include both proximity and non-proximity based ones, will be tested across hilly areas, rural and urban locations, he added.
On the programmability front, the system currently enables Person to Person (P2P) and Person to Merchant (P2M) transactions using digital rupee wallets provided by pilot banks, Das noted.

“It is now proposed to enable additional use cases using programmability and offline functionality,” he added.

What it means for users

The programmability feature will allow users like government agencies to ensure that payments are made for defined benefits, Das said, while noting that enterprises will also be able to use this programme for specific expenditures like business travel for their employees.
Additional features like validity period or geographical areas within which CDBC may be used can also be programmed with this programme, he mentioned.
Meanwhile, Das also announced RBI’s intent to enhance the security features of Aadhaar enabled Payment Systems (AePS). This system was used by 37 crore people in 2023.
“To enhance the security of AePS transactions, it is proposed to streamline the onboarding process, including mandatory due diligence, for AePS touch point operators, to be followed by banks,” Das highlighted.
Currently, lenders are using SMS for complying with the additional factor authentication requirements. However, advancements in technology have opened up newer means, he added.
“To facilitate the use of such mechanisms for digital security, it is proposed to adopt a principle-based ‘Framework for authentication of digital payment transactions’,” he explained.