ICICI Bank executes first secondary market transaction in G-Sec using CBDC: Source

Representative image

Private lender ICICI Bank on November 1 executed its first secondary market transaction in government securities using the Reserve Bank of India's (RBI) digital currency pilot project, a person aware of the development told Moneycontrol.

"The ICICI Bank has sold government securities maturing in 2027 to IDFC First Bank on the first of the pilot project," the person said requesting anonymity.

According to the NDS-OM CBDS trades on the CCIL website, bonds worth Rs 275 crore have been settled on the first day via wholesale CBDC.

Earlier today, Moneycontrol had reported that the RBI has provided the Negotiated Dealing System-Order Matching (NDS-OM) platform to nine banks to trade in government securities using the central bank’s digital currency as a pilot project. The new platform is called NDS-OM CBDC.

The central bank on October 31 had identified State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC to participate in the pilot project in this segment.

“Use of e₹-W is expected to make the inter-bank market more efficient,” the RBI said in a release.

Settlement in central bank money would reduce transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate settlement risk, the central bank said.

Other wholesale transactions and cross-border payments will be the focus of future pilots, based on learnings from this pilot, the RBI added.