e-RUPI vouchers get a boost from RBI monetary policy

What is e-RUPI and how it works?

The e-RUPI is an one-time payment mechanism system wherein beneficiaries of government schemes and other initiatives receive capital up to Rs 1 lakh directly on their phones via SMS or a QR code. Developing countries including India have set in place several direct beneficiary schemes intended towards empowering the poorest citizens. There have always been reports of corruption linked to such schemes and the e-RUPI can help reduce such instances. The biggest strength of e-RUPI is that it is secure, as details of beneficiaries are completely confidential and the required amount is already stored in the voucher. e-RUPI was launched by Prime Minister Narendra Modi in 2021.

Maximum limit of each e-RUPI shall not exceed Rs 10,000 or as defined by regulator.

e-RUPI operates on the Unified Payments Interface (UPI) system of the National Payments Corporation of India (NPCI).

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e-RUPI vouchers: Enable a wider reach and provide benefits

The proposal by the RBI to expand the scope and reach of e-RUPI digital voucher would enable a wider reach and accessibility to the benefits offered by Unified Payments Interface (UPI) as it operates on even the basic phones without the internet connection and there is no requirement for the beneficiary to have a bank account. “The decision of the RBI has a potential to propel the digital-first push by the Government and revolutionise the already robust system of digital payments in India,” says Vipul Jai, Partner, PSL Advocates & Solicitors.

“The announcement from RBI will make the benefits of the e-RUPI accessible to a wider set of users and further deepen the penetration of digital payments,” says Anand Kumar Bajaj, Founder, MD, & CEO, PayNearby. For instance, picture a token delivered in the form of an entitlement, capable of reimbursing bills, covering medical treatments for end users or donations for medical purpose. “We are readily awaiting the directions from the regulator to initiate these programs, as the technologies are already in place; we just need to plug in with the relevant partners and commence our initiatives,” says Bajaj.

“Although the achievement of a meaningful scale of adoption in real terms is something that remains to be seen,” says Avisha Gupta, Technology law Partner at Luthra and Luthra Law Offices India.

“This proposed expansion of the scope e-RUPI vouchers may have improved efficiency of government and corporate welfare programs, and reduction in frauds,” says Anupam Shukla, Partner, Pioneer Legal. He adds, these changes are still in the early stages of development though. Their impact will have to be seen.

“The issuance of e-RUPI on behalf of individuals is another area that can see traction in terms of offering an alternative to closed-loop gift-card type of prepaid instruments,” says Harish Prasad, Head of Banking- India, FIS.

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Can e-RUPI be redeemed for cash / cash back?

e-RUPI shall be permitted to be redeemed only for the purchase of goods and services from designated merchant bearing valid merchant category code (MCC), as defined by the issuer at the time of issuance of e-RUPI. e-RUPI shall not be permitted for cash out or cash back on redemption.

How many vouchers can be issued for 1 user?

Upto 10 e-RUPI vouchers can be issued for one programme on single mobile number / per unique beneficiary; the requirement shall be configurable as per the Scheme requirements.

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