Tag: RBI

Finance

HDFC Bank Integrates Digital Rupee (e₹) into SmartGateway Payment Platform

Tanisha Cardozo

Written by Tanisha Cardozo || Team Allycaral

HDFC Bank has announced the integration of the Reserve Bank of India’s Central Bank Digital Currency, the Digital Rupee (e₹), into its online merchant payment platform, SmartGateway, marking a significant step in expanding India’s digital payments ecosystem. The move enables merchants to offer customers a secure, sovereign-backed digital payment option directly within the HDFC Bank checkout experience.

With this integration, merchants using SmartGateway can now accept payments through the Digital Rupee at zero transaction cost, in addition to existing payment modes such as UPI, cards, and net banking. The enhancement is designed to provide customers with a seamless payment experience that is instant, secure, and free of intermediary charges.

As of December 2025, HDFC Bank is among the pilot banks participating in the RBI’s CBDC initiative, servicing approximately 8.45 lakh registered Digital Rupee wallets. The bank continues to see steady adoption, with nearly 13,000 to 15,000 new wallets being added every month, reflecting growing consumer and merchant confidence in the emerging digital currency.

For merchants, zero-cost acceptance of CBDC presents a future-ready payment option that offers improved settlement certainty and reduced operational overheads by eliminating intermediaries. For consumers, the Digital Rupee combines the convenience and speed associated with UPI with the added trust and assurance of an RBI-backed sovereign digital currency, ensuring fast and secure transactions.

By enabling CBDC acceptance on SmartGateway, HDFC Bank is expanding the choice of digital payment options available to customers while extending the benefits of the Digital Rupee to a broader base of businesses. The initiative underscores the bank’s digital-first approach and its continued focus on innovation in the payments space.

This integration further reinforces HDFC Bank’s commitment to supporting India’s transition towards a cash-light, inclusive digital economy, while positioning SmartGateway as a comprehensive and future-ready payment platform aligned with the country’s evolving financial landscape.

Human Interest

Rupee Slides to Record Low of 91.01 Amid Tariffs, FII Outflows and Trade Deal Uncertainty

Tanisha Cardozo

Written by Tanisha Cardozo || Team Allycaral

The Indian rupee weakened to a fresh all-time low of 91.01 against the US dollar on Tuesday, marking its fourth consecutive session of decline and extending an unprecedented slide in 2025. The currency fell as much as 36 paise intraday to 91.14 before recovering slightly, ending the session 23 paise lower despite a weaker dollar and falling global crude oil prices.

Forex traders attributed the sustained weakness to a combination of factors including the absence of intervention by the Reserve Bank of India, delays in finalising an India-US trade deal, and continued foreign institutional investor outflows. The rupee has dropped from 90 to 91 against the dollar in just the last 10 trading sessions and has slipped nearly 1% over the past five sessions alone, with traders warning that the 92-per-dollar mark could be tested later this month.

The dollar index was marginally lower at 98.23, while Brent crude declined nearly 2% to around $59.48 per barrel. However, these supportive global cues failed to arrest the rupee’s fall. Domestic equity markets also reflected the pressure, with the Sensex closing over 500 points lower and the Nifty 50 shedding more than 160 points.

Market experts noted that India’s currency has become the worst-performing in Asia this year, declining nearly 6% against the dollar and over 8.5% from its year-to-date peak. Analysts pointed to steep US tariffs on Indian exports and the lack of a bilateral trade agreement as key structural headwinds. Persistent selling by foreign investors has added to the pressure, creating a cycle of capital outflows and currency weakness.

Despite the sharp depreciation, economists believe the falling rupee is not significantly harming the broader economy. Low inflation, a narrowing trade deficit and strong GDP growth have allowed the RBI to maintain a hands-off approach. India’s trade deficit narrowed to a five-month low in November, while inflation remains well below the central bank’s target and economic growth continues to show resilience.

The rupee’s slide, however, has begun to weigh on stock market sentiment, with global funds pulling billions of dollars from Indian equities and debt in recent months. While exporters, particularly IT companies, have benefited from the weaker currency, analysts caution that overall equity returns may remain muted amid global uncertainty and capital flow challenges.

Market participants remain cautious, noting that a meaningful recovery in the rupee is unlikely unless there is a breakthrough in India-US trade negotiations. Until then, the path of least resistance for the currency is expected to remain on the weaker side.

Finance

RBI Launches Offline ‘Digi Rupee’: Money Transfers Now Possible Without Internet

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In a major leap toward digital financial inclusion, the Reserve Bank of India (RBI) has announced the launch of an offline feature for its Central Bank Digital Currency (CBDC), popularly known as the ‘Digi Rupee’.

The offline functionality allows users to transfer money without internet connectivity, a development aimed at empowering citizens in rural, remote, and low-connectivity areas across the country.

According to the RBI, this innovation will make digital payments more accessible, ensuring that even those without reliable network coverage can participate in India’s growing digital economy.

The offline Digi Rupee can be used for peer-to-peer (P2P) and person-to-merchant (P2M) transactions, just like digital wallets, but backed directly by the central bank — making it secure, instant, and cost-efficient.

Experts believe that the move could significantly boost the adoption of digital transactions and support the government’s broader Digital India mission.

The initiative also underscores RBI’s ongoing efforts to enhance financial inclusion and build a resilient payment ecosystem that reaches every citizen, regardless of connectivity.

With this step, India joins a small group of countries exploring offline digital currency technology, marking another milestone in its transformation into a digitally empowered economy.

Business

Indian Funds in Swiss Banks Tripled in 2024, Surging to ₹37,600 Crore

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But only a fraction belongs to individuals — corporate, institutional flows drive the spike

New Delhi | June 20, 2025 — In a financial development drawing attention from both economists and policymakers, Indian funds parked in Swiss banks surged more than threefold in 2024, reaching an estimated ₹37,600 crore (CHF 4.3 billion), according to official data released by Switzerland’s central bank. But while the headline figure is dramatic, a deeper look reveals that only a small portion — less than one-tenth — represents individual customer deposits.

📊 What’s Behind the Numbers?

The sharp rise reflects a jump in institutional and corporate flows, as well as increased holdings through securities, bonds, and other financial instruments — not personal wealth or black money, as often assumed in public discourse.

Breakdown of the ₹37,600 crore figure:

  • Individual deposits: Just around ₹3,400 crore
  • Fiduciary and institutional holdings: The bulk of the amount, over ₹34,000 crore
  • Securities & bonds: A major share, likely due to Indian entities using Swiss banking services for international financing and asset management

“It’s important to distinguish between legitimate international financial operations and personal wealth transfers,” said a senior RBI official familiar with global fund movements.

🏦 What Does ‘Indian Money in Swiss Banks’ Really Mean?

The Swiss National Bank (SNB) publishes annual data that reflects the liabilities of Swiss banks towards Indian clients, including:

  • Deposits by Indian individuals, companies, or financial institutions
  • Holdings in securities and bonds
  • Funds held via fiduciary accounts

Crucially, the figures do not include non-resident Indians (NRIs) holding funds through entities based outside India, nor do they imply illegal holdings.

🧾 Government Response and Clarification

The Ministry of Finance responded quickly to the public reaction, emphasizing that the rise does not reflect a surge in illicit funds or unaccounted wealth. Most of the increase is attributable to legitimate transactions by Indian corporations, investment firms, and foreign subsidiaries.

In fact, the Indian government has been actively cooperating with Swiss authorities since 2018 under Automatic Exchange of Information (AEOI) agreements, enabling tax authorities to track account details of Indian citizens abroad.

“Every year, tax authorities receive detailed data on Indian accounts in Swiss banks, leaving little room for secrecy,” a spokesperson from the Central Board of Direct Taxes (CBDT) stated.

📈 Historical Context: A Volatile Trend

This is not the first time Indian funds in Swiss banks have fluctuated significantly:

  • 2020: Sharp decline due to COVID and global banking contraction
  • 2021–22: Modest recovery
  • 2023: Slight drop amid global tightening
  • 2024: Over 3x surge, driven by institutional investment

Analysts caution against interpreting the rise as a return of so-called “black money,” and instead point to greater globalization of Indian capital and trade-linked financial activity.

🧐 So, Is There Cause for Concern?

Experts say not necessarily — though transparency and monitoring remain key.

“Large numbers always stir emotions, but the real story is that Indian companies are becoming more global and sophisticated in how they manage capital,” said Devina Mehta, economist at a leading Indian think tank.

That said, scrutiny of financial flows and enforcement of tax laws must continue to ensure compliance and discourage misuse.

✅ In Summary:

  • ₹37,600 crore: Indian money in Swiss banks as of 2024
  • Less than 10% is from personal deposits
  • Majority driven by corporate, fiduciary, and institutional flows
  • Authorities stress legality and ongoing data-sharing mechanisms
Business

RBI Empowers Young Indians: Minors Above 10 Can Now Open Bank Accounts Independently

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In a significant move towards promoting financial inclusion and independence among young individuals, the Reserve Bank of India (RBI) has allowed minors aged 10 years and above to open and manage savings or term deposit accounts on their own. This directive, issued on April 21, 2025, aims to foster financial literacy and responsibility among minors ¹.

Key Highlights of the New Guidelines

  • Age Eligibility: Minors above 10 years can independently open and operate savings and term deposit accounts.
  • Guardian Involvement: Minors can still open accounts with the help of their natural or legal guardian, including their mother.
  • Account Management: Banks will ensure that minor accounts are not overdrawn and remain in credit balance.
  • Customer Due Diligence: Banks must perform customer due diligence for deposit accounts of minors and undertake ongoing due diligence ¹ ².

What This Means for Minors and Parents

  • Increased Autonomy: Minors above 10 years can now take charge of their finances and manage their accounts independently.
  • Financial Literacy: This move encourages young individuals to learn about financial management and responsibility.
  • Banking Facilities: Banks may offer internet banking, ATM/debit cards, and cheque books to minor account holders based on their risk management policies ³ ⁴.

Implementation Timeline
Banks are required to revise their policies and align them with the revised guidelines by July 1, 2025. This will ensure a smooth transition and enable minors to take advantage of the new rules ⁵.

Benefits of Independent Account Management

  • Early Financial Independence: Minors can develop essential skills for managing finances and making informed decisions.
  • Encourages Savings: Independent account management can encourage minors to save and invest for their future.
  • Preparation for Adulthood: This move helps minors transition smoothly into adulthood and take charge of their financial lives ².