Nearly four years after its launch, India’s digital rupee struggles to replace existing payment platforms, but a shift towards programmable CBDC offers promising applications in welfare schemes, targeted transfers, and controlled spending, signalling a strategic pivot for the central bank’s digital currency initiative.
Nearly four years after the Reserve Bank of India launched its digital rupee pilot, the central bank’s retail central bank digital currency has still not broken through with ordinary users, largely because the Unified Payments Interface has already become the default for everyday payments. According to business reports on UPI, the system now has more than 450 million users and processes about 22 billion transactions a month, underlining the scale of the platform the digital rupee is trying to live alongside.
That has not stopped bankers from seeing a more promising role for the digital currency in programmable CBDC, a version that can be restricted to specific uses. Executives at Punjab National Bank, Canara Bank and Indian Bank told The New Indian Express that this format is gaining traction in welfare schemes, direct benefit transfers, targeted lending and employee benefits, where spending controls can be built into the payment itself.
Punjab National Bank chief executive Ashok Chandra said the lender is among the leading participants in the Reserve Bank’s programmable CBDC push and has already used it for DBT and subsidy schemes in at least one state. He said wider adoption should follow, and the bank now has about 172,000 CBDC users and nearly 1.53 million digital rupee transactions. Canara Bank chief executive Brajesh Kumar Singh said programmable CBDC is proving more useful than retail payments, citing deployments in Puducherry for the Pradhan Mantri Garib Jan Jan Kalyan Yojana and for some employee benefits.
Indian Bank chief executive Binod Kumar said programmable CBDC could help ensure loans and subsidies are spent only on approved purposes, such as machinery purchases or paddy procurement. The broader direction also appears to fit the Reserve Bank’s own planning: according to Business Standard, the central bank wants to expand digital rupee experiments in 2026-27 into cross-border payments, asset tokenisation, programmable money and welfare applications. That suggests the digital rupee’s clearest near-term value may lie not in competing with UPI at the checkout, but in controlled transfers where the ability to direct funds matters most.
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