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CBDC retail pilot: Some customers complain of technical glitches in apps, transactions

Customers of HDFC Bank, ICICI Bank, Yes Bank, Bank of Baroda and IDFC First Bank who participated in the retail digital rupee pilot have complained of technical problems and issues while making payments

April 13, 2023 / 05:44 PM IST
digital rupee cbdc retail pilot

Customers with some banks face issues with digital rupee pilot apps

Some customers who are participating in the ongoing retail Central Bank Digital Currency (CBDC) pilot have raised complaints of technical glitches while using the applications launched by banks. Customers are complaining of failure in transactions and error messages while making payments among other issues.

Moneycontrol has spoken to five such customers participating in the pilot.

What did the customers say?

Anuj Parmar, a media executive and a customer with IDFC First Bank, narrated his experience when he wasn’t able to log in and make transactions through the digital rupee application of IDFC First Bank.

“I was very excited to use the digital rupee. I got an email from the bank that I am invited for the digital rupee pilot. But when I tried registering and logging in, it did not happen. It showed some technical error,” Parmar said.

A few others shared their experiences on Google Play Store.

Hareesha Panoor, a customer with ICICI Bank, in a Google Play Store review said, “I can load money in the digital wallet. But when I tried to scan and pay, it showed the same error. I have been facing this for the last month.”

Nitesh Yadav, a software engineer based out of Noida, said that he faced issues while making payments on Yes Bank’s digital rupee application.

“Is anything wrong with the application? It showed some technical error,” Yadav tweeted.

Shrikant Khopkar, a customer with HDFC Bank, said that he was initially able to use the app for transfers but later technical issues started to pop-up.

"First transaction happened smoothly. But second transaction is not happening," Khopkar said.

Similarly, Ranjith R, a customer with Bank of Baroda (BOB) in a review said, “It showed the transaction failed, contact the application support team.”

BOB, in a response to Moneycontrol queries, said that the bank’s mobile application is not yet open to the general public and is open only to a select set of merchants and consumers.

“There are no technical issues faced as the app is not yet open to the general public. In the first phase, the bank is currently piloting the solution in a closed user group of consumers and merchants,” said a BOB spokesperson.

Yes Bank declined a comment; HDFC Bank, IDFC First Bank and ICICI Bank did not respond till the time of publishing.

An email sent to the Reserve Bank of India (RBI) seeking comments did not elicit any response till the time of filing this report.

What is the digital rupee pilot?

The RBI, on December 1, 2022, kick-started the pilot for the retail version of the CBDC, or digital rupee. The retail digital rupee, or e₹-R, can be used by people for day-to-day transactions. The pilot of the retail CBDC was started a month after the pilot launch of the wholesale CBDC.

Eight banks are participating in the retail pilot project, including State Bank of India (SBI), ICICI Bank, Yes Bank, IDFC First Bank, BOB, Union Bank of India, HDFC Bank and Kotak Mahindra Bank.

Also read: RBI plans to include 5 more banks and another 9 cities for retail CBDC system, says Deputy Governor

Under the pilot project, banks can invite selective customers and merchants to try the services through their mobile applications. After this, these users can make peer-to-peer transactions and peer-to-merchant transactions.

Users can deposit a certain amount in the digital wallet of the digital rupee mobile application. The digital wallet works in the same way as a normal wallet. The next step for the user to make payments is to scan the QR code of the receiver and enter the amount that is to be transferred. After this, the receiver’s digital wallet will show the amount credited whereas the sender’s wallet will have the amount debited.

Also read: RBI’s Retail digital rupee pilot kicks off today: Five things to know

Since the pilot, data with the RBI till February 2023 showed that close to 7.70 lakh small-value transactions have been carried out using the retail digital rupee in five cities.

The regulator is planning to expand the reach of the pilot project to a bigger set of customers. RBI Executive Director Ajay Kumar Choudhary, in a press conference on March 8, said that the central bank is targeting to scale up to half-a-million users by June-July 2023.

What do experts say?

Experts highlighted that there could be multiple reasons for the glitches faced by customers. For the technical issues during registration, Gaurav Samdaria, Chief Business Officer, Perfios, a software solutions company, said these errors are natural in the growth and operations of a new digital initiative.

“Errors are natural and happen when growth and operations of a digital initiative are happening,” Samdaria said.

Other than this, Abdeali Bhagat, an app developer and information technology expert, said these issues can also come with an abundance of load on the server of the bank.

“Sometimes the server/s of the bank cannot handle the pressure due to the incoming data volume. Due to this, there could be some errors,” Bhagat said.

But looking at the retail pilot project, which is for now only allowed on an invite basis, the volume should not be that much.

Here, Bhagat said, “There is also a point where banks have to work hard on managing the scalability of their backend processes. This can cause some issues too.”

Recently, some banks faced issues with their internet banking and other digital banking services. Among these, customers of HDFC Bank and SBI among others have raised issues with the bank’s server and digital payment services.

These issues, Samdaria said, could be due to the underlying infrastructure of the banks.

Also read: How e-rupee is different from UPI, RBI Governor explains

“Banks have an end-to-end integrated technology where they link each of their digital processes. All of this is part of a bank’s digital infrastructure. There could be issues if the banks have not integrated these correctly,” Samdaria said.

Experts said banks must allocate more resources internally and by partnering with digital infrastructure technology experts. Samdaria said, “Banks can work on having more testers involved in the reported issues.”

A digital technology analyst, who did not wish to be named, said that banks can partner with experts and companies who can help them build a sound digital infrastructure.

“Banks can partner with organisations which provide technology services that can help them build a solid infrastructure. They can tap fintechs and other digital solutions-focused brands,” the analyst said.

Jinit Parmar
Jinit Parmar is a correspondent based out of Mumbai covering banks, banking trends and more, tweets @jinitparmar10 #banks #bankingtrends #RBI
first published: Mar 30, 2023 09:19 am