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e-RUPI: A Game Changer in the Rural World

India, together with its huge population, has been taking successful steps towards digitization, especially in the banking sector. As of 2021, 22% of adults claim to have digital-only bank accounts and the number is likely to grow exponentially by a whopping 21% by the year 2025. Keeping the potential in mind, the Government of India (GOI) in collaboration with the National Payment Corporation of India (NPCI) introduced e-RUPI, an SMS/e-voucher based payment method to benefit the people of India.

What is e-RUPI?

E-Rupi is a one-time payment method where an individual does not require a bank account. The said individual will receive a one-time QR code on his mobile or can avail an e-voucher at specified centers for determined benefits/schemes that the voucher has been generated for and present it to the merchant at the time of purchase. Owing to its instant payment method functionality, it is akin to cash but in this case, digital cash.

Why e-RUPI?

The GOI introduced e-RUPI intending to enable the rural population of India and to further this goal with ease, NPCI has partnered with 11 banks, namely, Axis Bank, Bank of Baroda, Canara Bank, HDFC Bank, ICICI Bank, Indian Bank, IndusInd Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India and Union Bank of India to touch base the audience. The said target audience comprises of 190 million underbanked individuals. While the Urban population enjoys digital banking, the rural population is often left with a hassled procedure to benefit or utilize government funds/schemes.

How will it benefit the rural population?

  • Since a person does not require a bank account to avail these e-vouchers, it will prove to be an ease of function for the rural population where banks do not have a presence.
  • Owing to its SMS functionality, a smartphone is not imperative and the population with basic mobile phones can also avail benefits.
  • e-RUPI will succor curbing fraudulent activities since it eliminates the need of a middleman.
  • Since the e-vouchers/SMS codes will be issued to verified individuals whose information will be stored in a database, it will eliminate duplication or transferability.
  • By introducing e-RUPI, the deepest of the rural areas can be served with an identity proof being the only prerequisite.
  • It will be easier for the government to disburse Direct Benefit Schemes (DBT)

While the first phase focuses on healthcare system explicitly, the subsequent plan entail other sectors too. The financial world seems riveted by e-RUPI and its implications and indulging into intricacies of its benefits to the financial world will be a topic of interest.