Union Bank of India Faces Employee Resistance in Shifting Benefit Claims to Digital Rupee Wallet

In a strategic move to boost the adoption of the Reserve Bank of India’s (RBI) digital rupee, Union Bank of India, a state-owned bank, is planning to redirect claims related to employee benefit schemes directly to the Central Bank Digital Currency (CBDC) wallet. The initiative aims to encourage staff members to conduct transactions through the digital currency, promoting the use of the digital rupee app.

In a communication issued on December 26, the bank urged all employees to register on the digital rupee app and emphasized the transfer of the newspaper allowance directly to the CBDC wallet. However, a pilot run of this plan is facing opposition from some employees.

The All India Union Bank Employees Federation is protesting the move, asserting that management cannot mandate the use of the wallet. In a letter dated December 28, the association emphasized that CBDC usage should be optional, and employees should not be compelled to use it without their consent.

The RBI had launched CBDC – Retail on December 1, 2022, marking a digital transformation of paper currency into the digital rupee. According to reports, the RBI successfully achieved its goal of reaching a million daily transactions in the retail segment of CBDC on December 27. Incentives, such as cashbacks and reward points, are being offered by several banks to further encourage the adoption of digital currency.