As per sources, Indian banks have been encouraged by the Reserve Bank of India to increase transaction volumes by offering incentives for conducting transactions with the central bank's digital currency, the e-rupee. They mentioned that the incentives span a variety of options, including cashback and reward points, much like the offerings provided by banks for credit and debit cards.

In December, the RBI initiated a pilot program to introduce the e-rupee, with the ambitious goal of achieving one million transactions per day by the end of the year. According to a source familiar with the matter, retail transactions continue to fall short of the desired target, averaging approximately 25,000 per day. As a result, the central bank is taking proactive measures in response to this situation.

According to Reuters, the central bank introduced new features last month, such as connecting the digital currency to India's widely used real-time payments system, the Unified Payment Interface (UPI), in order to appeal to users.

The largest private lender in India, HDFC Bank, has introduced these offers in order to increase the scope of these transactions, according to Parag Rao, the country head for payments, liability products, consumer finance, and marketing at the bank.

According to the second source, smaller private lenders Yes Bank and IDFC First Bank are providing reward points that can be redeemed for travel bookings, mobile recharges, and cashback through the FastTag highway toll collection system.