Indian Overseas Bank has launched the IOB Digital Rupee application, allowing customers to use India’s Digital Rupee through a dedicated mobile app for person-to-person and person-to-merchant payments.
The public sector bank said the application enables customers to maintain Digital Rupee wallets and make instant P2P and P2M transactions. It also supports UPI interoperability, giving users an additional digital payment option alongside existing UPI applications.
According to IOB, the application has been designed with a focus on security, ease of use and accessibility. The bank described the platform as a way to expand its digital payment services while allowing customers to transact using the e₹ system.
IOB MD and CEO Ajay Kumar Srivastava said the launch was another step in the bank’s digital transformation journey. “The Digital Rupee complements the existing digital payment ecosystem and offers customers a secure, convenient and innovative payment option,” he said.
The application also includes programmable CBDC functionality, or PCBDC. IOB said this feature can support purpose-specific disbursement and utilisation of government grants and benefits through CBDC. The functionality could also be used for Direct Benefit Transfer and other government-sponsored benefits, according to the bank.
Unlike a general-purpose payment facility, programmable CBDC functionality is intended to link the use of funds to a defined purpose or disbursement programme. In IOB’s stated use case, this could allow government departments and other programme administrators to structure the delivery and utilisation of grants or benefits through the Digital Rupee application. The bank did not disclose a specific government programme being implemented through the facility at the time of the announcement.
IOB said it was actively engaging with various government departments to explore opportunities to act as a Sponsor Bank for PCBDC-based fund-disbursement programmes. The bank did not provide details of the departments involved, the value of potential programmes or a timeline for such arrangements.
For customers, the immediate change is the availability of a bank-backed Digital Rupee wallet with payment functionality across peer and merchant transactions, together with interoperability with UPI. The application adds another interface to India’s expanding digital payment infrastructure, while its proposed government-use functionality links retail payment technology with the administration of public benefits.
The launch therefore covers two distinct functions: everyday digital payments and the potential use of programmable CBDC for targeted public disbursements. IOB’s next stated step is to continue discussions with government departments on possible PCBDC-based fund-disbursement programmes.
