<p>
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      Across Southeast Asia, much of the work of financial inclusion is done by small institutions. Rural banks, cooperative banks, credit cooperatives, people&#39;s credit funds and microfinance institutions serve the farmer, the fisherman, the market vendor and the micro-entrepreneur, people that large commercial banks often find too costly to reach.</p><p>These institutions are trusted locally, but most are held back by the same two problems. The first is technology that is either too expensive or too rigid for an institution of their size. The second is the network itself: branches, agents and field officers often work across islands, mountains and rural districts where connectivity is slow, patchy or missing for hours.</p><p>This blog looks at both problems together, because in practice they are one decision. Choosing a core banking system is also choosing how well the institution will serve customers at the edge of the network. It also explains how M2P&#39;s Core Banking System (CBS) addresses both, drawing on what it has already delivered for community-focused partner banks.</p><h2>The Reality for Smaller Financial Institutions in Southeast Asia</h2><p>Small institutions carry a large share of everyday finance across the region, and regulators are pushing them to modernise.</p><p><strong>Indonesia</strong> had 1,345 rural banks (Bank Perekonomian Rakyat, or BPR) as of March 2025, according to the Financial Services Authority (OJK). OJK is driving consolidation and digitalisation across the sector. By December 2025, it had approved the merger of 130 BPRs and Sharia rural banks (BPRS) into 45, with another 226 in the process of becoming 79. OJK has also named digitalisation as one of the pillars of its rural bank development roadmap.</p><p><strong>The Philippines</strong> had 374 rural and cooperative banks as of mid-2025, according to Bangko Sentral ng Pilipinas (BSP) data. In 2026, the BSP set out rules for technical assistance to fund rural banks&#39; digitalisation for up to three years under its Rural Bank Strengthening Program. This includes support for moving to cloud-based core banking. At the same time, the BSP requires thrift, rural and cooperative banks that operate like digital banks to meet the same P1 billion minimum capital as digital banks.</p><p>Similar roles are played by people&#39;s credit funds in Vietnam, microfinance institutions in Cambodia and Myanmar, and credit cooperatives across the region. Most of them face the same pressures:</p><ul class="list-bullet"><li
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        ><strong>Legacy or fragmented systems:</strong> Many still run on ageing software, standalone branch databases, or a mix of spreadsheets and accounting packages. Customer data is split across branches, and reconciliation is manual.</li><li
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        ><strong>High cost of ownership:</strong> Traditional cores are priced and built for large banks. Licence fees, hardware, upgrades and specialist staff consume a budget that small institutions cannot spare.</li><li
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        ><strong>Rigid product design:</strong> Group loans, savings schemes, share capital, Sharia-compliant products and seasonal agricultural credit often need custom development, which is slow and expensive.</li><li
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        ><strong>Consolidation and mergers:</strong> Institutions merging under regulatory pressure need to bring multiple portfolios onto one system quickly and accurately.</li><li
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        ><strong>Rising regulatory expectations:</strong> Supervisors expect accurate, timely reporting, stronger IT risk management and better controls.</li><li
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        ><strong>Pressure to go digital:</strong> Customers expect mobile access, instant transfers and agent services, which a closed legacy core struggles to support.</li></ul><p>The result is that many smaller institutions spend more on keeping their systems running than on serving customers. A modern core needs to reverse that balance.</p><h2>What an Affordable, Configurable Core Must Do for Smaller Institutions</h2><p>A core banking system for a rural bank, cooperative or microfinance institution should not be a scaled-down version of a large bank&#39;s system. It should be designed around how these institutions actually work. Six capabilities matter most.</p><h3>1. Pricing that scales with the institution</h3><p>Small institutions need costs that grow with their customer base and transaction volumes, not large upfront licence fees. Cloud and SaaS deployment removes much of the hardware and data centre spend, an approach regulators such as the BSP are now actively supporting for rural banks.</p><h3>2. Products configured, not coded</h3><p>The product catalogue of a cooperative or rural bank looks very different from a commercial bank&#39;s. It may include member share capital, patronage refunds, group loans with weekly repayments, salary-deduction loans, harvest-linked agricultural credit and Sharia-compliant financing. A modern core should let staff configure these products, profit and interest rules, fees and limits through parameters, without waiting months for custom development.</p><h3>3. A single, accurate view of every customer</h3><p>All accounts, loans, savings and transactions should sit in one centralised, real-time ledger. This ends duplicate customer records across branches, simplifies KYC and gives management a reliable picture of the portfolio at any time. It also makes consolidation far easier when institutions merge.</p><h3>4. Open APIs for digital channels and local rails</h3><p>Customers increasingly expect to transact through mobile apps, agents and instant payment rails. An API-first core lets an institution connect to mobile banking, cards, national payment systems and fintech partners without rebuilding its core each time.</p><h3>5. Compliance and controls built in</h3><p>Regulatory reports, audit trails, maker-checker approvals and fraud monitoring should be part of the core, not separate projects. This matters even more for small institutions with lean compliance and IT teams.</p><h3>6. Migration without disruption</h3><p>Moving years of customer data out of a legacy system, or merging several institutions&#39; portfolios, is the step most institutions fear. The right partner brings proven migration methods and the ability to run alongside existing systems where needed, instead of forcing a risky big-bang switch.</p><h2>Southeast Asia&#39;s Connectivity Gap and Why It Matters for Core Operations</h2><p>Southeast Asia has made rapid progress online. According to GSMA Intelligence, mobile internet penetration in the region rose by almost 20 percentage points in five years to reach 76% by the end of 2025. But the gains are uneven. Across developing Asia Pacific, people in rural areas are 25% less likely to use mobile internet than those in cities, held back by affordability, digital skills and safety concerns.</p><p>Geography adds to the challenge. Archipelagos such as Indonesia and the Philippines spread communities across thousands of islands, while mountainous and remote inland areas in countries like Vietnam, Laos, Cambodia and Myanmar face similar gaps. This is exactly where rural banks, cooperatives and microfinance institutions operate. For their operations, the gap shows up in practical ways:</p><ul class="list-bullet"><li
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        ><strong>Branches lose their link to the core</strong> during outages, and tellers cannot post deposits or check balances.</li><li
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        ><strong>Field officers and agents</strong> collect repayments in villages, markets and fishing communities with weak signal, so transactions are recorded late or on paper.</li><li
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        ><strong>Customers cannot use self-service channels</strong> because they lack a smartphone, a data plan or the confidence to use them.</li><li
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        ><strong>Reconciliation becomes a daily burden</strong>, as late-posted transactions create mismatches between agent cash, customer balances and the ledger.</li></ul><p>For a small institution, each of these problems erodes trust, adds operational cost and limits growth beyond the branch network. A core banking strategy for the region has to start from the assumption that connectivity will not always be reliable at the edge.</p><h2>Designing Core Operations That Hold Up When Networks Don&#39;t</h2><p>There are two broad ways to keep banking running where connectivity is weak. Both have a place, but they lead to very different outcomes for customers and agents.</p><h3>The traditional approach: store-and-forward</h3><p>In the store-and-forward model, an agent&#39;s device captures a transaction offline, stores it locally and uploads the batch when it reaches a network. The core then processes the batch, usually at end of day.</p><p>This model keeps service going, but it has real drawbacks:</p><ul class="list-bullet"><li
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        ><strong>Late failures:</strong> A withdrawal can be approved at the counter and declined hours later during batch processing, leading to disputes and lost trust.</li><li
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        ><strong>Delayed settlement:</strong> Agents&#39; funds stay tied up until reconciliation is complete, which strains their liquidity.</li><li
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        ><strong>Security exposure:</strong> Transaction data stored on a device can be lost or compromised.</li><li
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        ><strong>Reconciliation effort:</strong> Mismatches between offline records and the ledger have to be resolved manually.</li></ul><h3>The modern approach: real-time, agent-led banking</h3><p>The alternative is to keep the core always available and move the connectivity requirement to the point where it is easiest to solve. Instead of every customer needing a smartphone and data, a network of trained agents carries the connected device. Customers visit a local agent, authenticate, and complete transactions that are posted to the core instantly.</p><p>This model has clear advantages for rural and cooperative networks across Southeast Asia:</p><ul class="list-bullet"><li
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        ><strong>No customer-side barriers:</strong> The customer needs no smartphone, data plan or app.</li><li
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        ><strong>Instant confirmation:</strong> Balances are checked and updated in real time, so there are no late declines.</li><li
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        ><strong>Faster agent settlement:</strong> Agent accounts are updated as each transaction is posted.</li><li
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        ><strong>Simpler reconciliation:</strong> One real-time ledger means far fewer mismatches.</li></ul><p>To make this work, the core must be available around the clock, handle high volumes of small transactions, and integrate easily with agent devices and authentication services. It should also give the institution full control over agent limits, commissions and monitoring.</p><p>The practical design principle is simple: keep the core always on, and reduce how much connectivity each transaction needs at the edge. The fewer steps that depend on the customer&#39;s own device and network, the more reliable the service.</p><h2>How M2P Has Solved This for Its Partner Banks</h2><p>M2P has already put the real-time, agent-led model into production for community-focused banks in India, a market with many of the same challenges as Southeast Asia: large rural populations, uneven connectivity and customers who are new to formal banking.</p><p>M2P&#39;s Core Banking System is a 24x7 platform built for continuous, real-time processing. Rather than relying on delayed offline batches, M2P helps partner banks reach remote customers through networks of agents who carry out authenticated transactions that are posted to the core instantly.</p><h3>A cooperative bank reaching remote customers</h3><p>A cooperative bank in India migrated from its legacy system to M2P&#39;s Core Banking System. Many of its customers are senior citizens and less tech-savvy people in remote areas.</p><p>To reach them, M2P implemented a biometric, agent-led payment service integrated with the core. Customers visit a local agent, authenticate with a fingerprint, and complete their transaction in real time. They do not need a smartphone, data plan, card or PIN. On the day the service went live, the bank onboarded more than 500 agents from remote locations.</p><h3>A rural-focused cooperative bank</h3><p>Another cooperative bank, focused on lower-income customers in rural areas, also moved to M2P&#39;s Core Banking System. The bank had built its rural strategy around mobile field agents who collect deposits in villages, along with debit cards, a mobile app with instant transfers, and biometric ATM access. A modern core gave the bank a stronger foundation for extending these services.</p><h3>A small finance bank migrating at scale</h3><p>Scale matters as much as reach. A small finance bank in India replaced its core banking system with M2P&#39;s Core Banking System, migrating 111 branches and over 1.5 million customers.</p><p><em>Want to know more about these deployments? </em><a href="https://m2pfintech.com/contact-us/" rel="noopener noreferrer" target="_blank">Reach out to us</a><em> for detailed case studies.</em></p><h3>What this means for Southeast Asia</h3><p>The lessons from these deployments apply directly to rural banks, cooperatives and microfinance institutions across Southeast Asia:</p><ul class="list-bullet"><li
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        ><strong>Shift the connectivity burden to the agent</strong>, so customers without smartphones or data can still bank.</li><li
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        ><strong>Keep the core always on and real-time</strong>, so every transaction is confirmed instantly and agent cash stays reconciled.</li><li
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        ><strong>Use authentication that customers already have</strong>, such as biometrics linked to national ID systems, instead of relying on cards and PINs.</li><li
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        ><strong>Scale the agent network quickly</strong>, without adding branches across islands or remote districts.</li></ul><p>In each market, the same model can be connected to local payment rails and identity systems, based on the country&#39;s infrastructure and regulations.</p><h2>Why M2P Core Banking Is a Strong Fit for Southeast Asia&#39;s Smaller Institutions</h2><p>M2P&#39;s Core Banking System brings together the affordability, configurability and always-on design that smaller institutions in the region need.</p><ul class="list-bullet"><li
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        ><strong>Modern architecture:</strong> Built on microservices, API-first and cloud-agnostic, so institutions can deploy in the environment that suits their regulator and budget.</li><li
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        ><strong>Low-code product configuration:</strong> New savings, deposit and loan products can be designed and launched quickly through configuration rather than custom development.</li><li
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        ><strong>Real-time, 24x7 processing:</strong> Every transaction is posted instantly to a single ledger, supporting branches, agents and digital channels together.</li><li
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        ><strong>Built for local rails:</strong> M2P&#39;s Core Banking System already supports the Philippines&#39; InstaPay for real-time transfers and PESONet for batch interbank payments. Its open APIs connect the core to mobile banking, cards, KYC services and fintech partners.</li><li
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        ><strong>Built-in risk controls:</strong> A pre-integrated Fraud Risk Management (FRM) engine supports secure operations from day one.</li><li
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        ><strong>Proven migrations:</strong> M2P has moved banks from legacy systems to its Core Banking System at scale, including a small finance bank with 111 branches. This experience is valuable for institutions consolidating multiple portfolios.</li><li
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        ><strong>More than a core:</strong> Institutions can add lending, microfinance, cards, payments and KYC capabilities from the same infrastructure partner as they grow.</li></ul><h3>A partner with a long-term regional focus</h3><p>M2P serves more than 200 banks, 300 lenders and 800 fintechs across over 30 markets. The company has named the Philippines and Indonesia among its key markets for international growth. Its US$100 million Series D round, led by Helios Investment Partners, was raised to support expansion across Africa and Southeast Asia.</p><p>For a rural bank, cooperative or microfinance institution, this combination means a modern core designed for real-time, last-mile banking, backed by a partner committed to the region for the long term.</p><h2>Conclusion</h2><p>Southeast Asia&#39;s rural banks, cooperatives and microfinance institutions are central to financial inclusion, but many are held back by systems that cost too much, adapt too slowly and break down where the network is weak. With regulators in Indonesia and the Philippines actively pushing consolidation and digitalisation, the time to modernise is now.</p><p>An affordable, configurable core lets smaller institutions launch the products their customers need without heavy custom development. A real-time, agent-led operating model lets them reach customers at the edge of the network without asking those customers to own a smartphone or pay for data.</p><p>M2P has already delivered this model for community-focused partner banks, with real-time agent networks reaching remote customers from day one. With a modern, API-first Core Banking System that already supports local payment rails, M2P is a strong option for smaller institutions across Southeast Asia that are ready to modernise.</p><p><strong>Ready to modernise your core?</strong> <a href="https://m2pfintech.com/contact-us/" rel="noopener noreferrer" target="_blank">Contact M2P</a> to explore how M2P&#39;s Core Banking System can support your institution&#39;s growth across Southeast Asia.</p>

Core Banking for Southeast Asia's Rural Banks, Cooperatives and Microfinance Institutions: Scalable, Configurable, and Built for Patchy Networks

<p>
        <img
          alt="Core Banking Transformation: How a Leading Indian Digital Bank Scaled Faster with M2P’s Turing Platform"
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      <br />A leading digital‑first bank in India undertook a full transformation of its core banking infrastructure by migrating to M2P Fintech’s <a href="https://m2pfintech.com/blog/unlock-the-future-of-banking-with-next-gen-core-banking-solutions/">Turing Core Banking Platform</a>. The bank, serving millions of customers across digital and assisted channels, faced escalating challenges from its aging monolithic system: </p><ul class="list-bullet"><li
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        >Slow product launches</li><li
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        >Lack of real‑time capabilities </li><li
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        >High operational overhead </li><li
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        >Limited scalability for modern payments </li><li
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        >Fragmented tech stack with multiple vendors </li></ul><p>To unlock the next phase of growth, the bank selected M2P’s cloud‑native, microservices-driven Turing Core—a unified platform delivering core banking, cards, UPI switch, wallets, reconciliation, compliance workflows and more. </p><p>The migration—completed in under 90 days for 2.5 million+ customer accounts—not only modernized the bank’s technology foundation but enabled rapid digital product innovation, increased revenue throughput, and strengthened compliance and operational efficiency.  </p><h2><strong>Problem Statement</strong> </h2><p>The bank’s legacy core system created multiple structural bottlenecks: </p><ul class="list-bullet"><li
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        >Monolithic architecture restricted scalability and slowed down innovation</li><li
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        >Manual processes and disjointed systems increased dependence on operations teams</li><li
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        >Weak support for modern digital payments, especially real-time rails</li><li
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        >High cost of maintaining multiple technology vendors with patchy integrations</li><li
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        >Regulatory agility was hampered due to limitations in reporting, audit trails, and API surfaces</li></ul><p>The bank needed a future-ready core that could scale to millions of customers, unify its product ecosystem, and support both digital-first and assisted channels.  </p><h2><strong>Why M2P Was the Ideal Strategic Partner</strong>?</h2><p>M2P offered a composable, end‑to‑end banking and payments stack—removing the need for multiple vendor integrations and enabling the bank to deploy new capabilities significantly faster. </p><h4><strong>Single Vendor. Complete Banking Stack. Zero Friction.</strong> </h4><h4>M2P’s platform delivered: </h4><ul class="list-bullet"><li
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        >Turing Core Banking System (cloud-native, microservices-based) </li><li
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        >UPI switch &amp; payments infrastructure </li><li
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        >Card issuance, management &amp; processing </li><li
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        >Wallets / PPIs </li><li
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        >Inbuilt reconciliation and settlement engine </li><li
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        >Audit, reporting, and regulatory workflows </li><li
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        >API-first architecture for internal and partner channels </li></ul><p><strong>This drastically reduced integration complexity and unlocked speed, scalability, and compliance-readiness for the bank.</strong></p><h2><strong>Technology Advancements Enabled by M2P</strong></h2><h4><strong>1. Modern, Cloud-Native Core (Turing CBS)</strong> </h4><ul class="list-bullet"><li
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        >Cloud-agnostic deployment </li><li
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        >Highly modular and API-first </li><li
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        >Enables rapid feature rollout and configurable products </li></ul><h4><strong>2. Large-Scale Migration in &lt; 90 Days</strong> </h4><ul class="list-bullet"><li
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        >Over 2.5 million accounts migrated seamlessly </li><li
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        >Parallel enablement of debit card issuance, wallet services, and core upgrades </li></ul><h4><strong>3. Banking-as-a-Service (BaaS) Capabilities</strong> </h4><ul class="list-bullet"><li
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        >Exposes configurable building blocks </li><li
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        >Enables ecosystem partners, fintechs, and assisted channels to plug in effortlessly </li></ul><h4><strong>4. UPI &amp; Payments Switch</strong> </h4><ul class="list-bullet"><li
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        >Cloud-native, elastic, and high-availability design </li><li
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        >NPCI-certified </li><li
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        >Reduced total cost of ownership (TCO) </li></ul><h4><strong>5. Compliance, Audit &amp; Operational Controls</strong> </h4><ul class="list-bullet"><li
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        >Automated reporting and reconciliation </li><li
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        >Built-in workflows aligned with RBI’s IT governance and outsourcing framework </li><li
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        >Strengthened risk and fraud controls</li></ul><h2><strong>New Capabilities Unlocked After Migration</strong> </h2><h3><strong>1. Debit Cards</strong> </h3><ul class="list-bullet"><li
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        >Instant virtual &amp; physical card issuance </li><li
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        >Real-time PIN management </li><li
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        >Fee management, card lifecycle, and operations tooling </li><li
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        >Unified and automated reconciliation </li><li
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        >Smooth migration from legacy card system </li></ul><h3><strong>2. UPI &amp; Payments Infrastructure</strong> </h3><ul class="list-bullet"><li
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        >Full-stack UPI (App + TPAP-ready + Switch) </li><li
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        >Merchant acquiring capabilities </li><li
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        >Intelligent routing for high-volume retail payments </li></ul><h3><strong>3. Wallets / PPIs</strong> </h3><ul class="list-bullet"><li
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        >Issuance and lifecycle management </li><li
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        >Unified control for prepaid programs </li><li
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        >Native support for PPI-on-UPI trends </li></ul><h3><strong>4. Sweep Accounts</strong> </h3><ul class="list-bullet"><li
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        >Automated thresholding and sweep rules </li><li
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        >Seamless integration with partner banks </li><li
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        >Real-time posting and reconciliation </li></ul><h3><strong>5. Direct Benefit Transfers (DBT)</strong> </h3><ul class="list-bullet"><li
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        >Native support for PFMS, NPCI, and Aadhaar-seeded account flows </li><li
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        >Strong audit trails and automated exception handling </li><li
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        >Supports AEPS withdrawals through assisted channels  </li></ul><h2><strong>Impact on Growth &amp; Revenue</strong> </h2><p>Within months of migration, the bank saw measurable transformation: </p><ul class="list-bullet"><li
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        >Customer base tripled </li><li
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        >Deposit base grew 3x </li><li
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        >1 million+ monthly active UPI users </li><li
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        >Significant year-on-year revenue uplift </li></ul><p><strong>The unified stack accelerated both acquisition and engagement while reducing costs. </strong> </p><h2><strong>Integration with Digital &amp; Assisted Channels</strong></h2><p>M2P enabled native integration across the bank’s digital ecosystem: </p><ul class="list-bullet"><li
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        >Digital Savings Accounts with instant onboarding </li><li
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        >UPI handle creation &amp; management </li><li
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        >Real-time account management, bill payments, and transfers </li><li
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        >Assisted channel enablement (AEPS, DMT) through rich APIs </li><li
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        >Merchant acquiring using M2P’s payments rails </li></ul><p><strong>This allowed the bank to deliver a truly unified customer experience across all channels.  </strong></p><h2><strong>Enhanced Capabilities for Sweep Accounts &amp; DBT</strong> </h2><h3><strong>Sweep Account Enablement</strong> </h3><ul class="list-bullet"><li
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        >Automated sweep-out workflows </li><li
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        >Consent capture &amp; management </li><li
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        >Posting, reconciliation, and reporting out-of-the-box </li><li
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        >Fully compliant with Payment Bank guidelines </li></ul><h3><strong>DBT Enablement</strong> </h3><ul class="list-bullet"><li
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        >Real-time processing via PFMS ↔ NPCI </li><li
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        >Aadhaar-enabled crediting and withdrawals </li><li
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        >Scalable assisted channel operations </li><li
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        >Faster SLA adherence through integrated workflows</li></ul><h4><strong>Client Testimonial</strong> </h4><p><em>“M2P’s comprehensive banking stack has been the backbone of our transformation journey. Migrating over 2.5 million accounts in under 90 days while launching new digital services was remarkable. The Turing Core has enabled real-time capabilities, seamless scalability, and rapid innovation across our programs.”</em> <br />— CIO, Leading Indian Digital Bank  </p><h2><strong>Takeaways</strong></h2><p>By adopting M2P’s Turing Core Banking Platform, the bank transitioned into a digitally agile, compliant, and scalable financial institution. Its transformation stands as a model for modern banks that aim to: </p><ul class="list-bullet"><li
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        >Scale rapidly </li><li
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        >Reduce vendor complexity </li><li
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          style=""
          value="3"
        >Embrace digital-first services </li><li
          class=""
          style=""
          value="4"
        >Launch products faster </li><li
          class=""
          style=""
          value="5"
        >Strengthen compliance &amp; real-time operations </li></ul><p>For banks seeking a future-proof core, <a href="https://m2pfintech.com/turing-core-banking/?utm_source=blog&amp;utm_medium=cta&amp;utm_campaign=cstdy">M2P’s Turing platform</a> offers unmatched depth, speed, and flexibility—making it the clear choice for next-generation banking.</p>

Core Banking Transformation: How a Leading Indian Digital Bank Scaled Faster with M2P’s Turing Platform


        <img
          alt="M2P Fintech"
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      <p style="text-align: justify;">The past few days, we have been hearing, seeing or reading the word e-RUPI everywhere. And it has ignited a plethora of questions amongst both consumers, corporates and fintech alike. But, while the initial impression was that it was the precursor of Central Bank Digital Currency (CBDC), it was not so.</p><p style="text-align: justify;">Launched on August 2nd, 2021, at 4.30 pm, e-RUPI was developed by the National Payments Corporation of India on its UPI platform. It is a contactless and <a href="https://m2pfintech.com/blog/ready-to-sneak-peek-into-global-cashless-societies/">cashless</a> instrument for digital payment. The Department of National Health Authority, Ministry of Health &amp; Family Welfare and the Department of Financial Services have also collaborated with NPCI in formulating and launching this solution.</p><blockquote><p style="text-align: justify;"><em><strong>E-RUPI signifies how 21st century India is moving ahead with the help of modern technology and connecting technology with people’s lives,” says prime minister Narendra Modi</strong></em></p></blockquote><p style="text-align: justify;">The primary application of e-RUPI is to disperse welfare payments to the right beneficiaries using a one-time payment mechanism. It eliminates the need for middlemen and connects the program sponsors and beneficiaries directly. It is similar to a digital gift card and requires no bank account, smartphone or <a href="https://m2pfintech.com/blog/the-rise-of-digital-payments/">digital payment</a> app. It is a person and purpose-specific payment initiative.</p><h2 style="text-align: justify;">How e-RUPI works?</h2><p style="text-align: justify;">e-RUPI is a one-time payment mechanism delivered as a QR code or an SMS string to the beneficiary’s mobile number. It works more like a prepaid gift card that can be redeemed only at specific service provider touchpoints.</p><p style="text-align: justify;">Also, the system ensures that the service provider is paid only after the beneficiary completes the transaction. Being <a href="https://m2pfintech.com/blog/how-to-implement-the-best-prepaid-payment-instrument-ppi-for-your-business/">a prepaid payment instrument (PPI), t</a>he service provider is also assured of the payment. There is no need to follow any intermediary for payment transfer.</p><p style="text-align: justify;">It doesn’t require any debit or <a href="https://m2pfintech.com/blog/credit-card-processing-a-definitive-guide/">credit card</a> for its function. In short, e-RUPI is all set to connect beneficiaries and sponsors digitally, minus the need for a physical interface.</p><p style="text-align: justify;">Built on NPCI’s UPI platform, e-RUPI has onboarded banks as issuing entities. As a result, any corporate or government agency can approach these issuing entities and deploy an e-RUPI program for their target beneficiaries.</p><p style="text-align: justify;">At present, 11 banks support this initiative, and they are split into two categories:</p><p style="text-align: justify;">Banks that can issue and accept e-RUPI vouchers:</p><ul class="list-bullet"><li
          class=""
          style="text-align: justify;"
          value="1"
        >The State Bank of India</li><li
          class=""
          style="text-align: justify;"
          value="2"
        >ICICI Bank</li><li
          class=""
          style="text-align: justify;"
          value="3"
        >HDFC Bank</li><li
          class=""
          style="text-align: justify;"
          value="4"
        >The Punjab National Bank</li><li
          class=""
          style="text-align: justify;"
          value="5"
        >Axis Bank</li><li
          class=""
          style="text-align: justify;"
          value="6"
        >Bank of Baroda</li></ul><p style="text-align: justify;">Banks who can only issue e-RUPI:</p><ul class="list-bullet"><li
          class=""
          style="text-align: justify;"
          value="1"
        >Canara Bank</li><li
          class=""
          style="text-align: justify;"
          value="2"
        >IndusInd Bank</li><li
          class=""
          style="text-align: justify;"
          value="3"
        >Indian Bank</li><li
          class=""
          style="text-align: justify;"
          value="4"
        >Kotak Bank</li><li
          class=""
          style="text-align: justify;"
          value="5"
        >Union Bank of India</li></ul><h2 style="text-align: justify;">Are e-RUPI and Central Bank Digital Currency one and the same?</h2><p style="text-align: justify;">Incidentally, e-RUPI’s announcement came a few days after announcing the phased implementation strategy of Central Bank Digital Currency (CBDC). So, it sparked speculation that e-RUPI might be a trail leading to CBDC.</p><p style="text-align: justify;">But there exists a rudimentary difference between the two. e-RUPI is an e-voucher based system that disburses money as it is still supported by the existing Indian rupee. Whereas CBDC deals with money creation. Click here to know more about <a href="https://m2pfintech.com/blog/central-bank-digital-currency-cbdc-101-a-primer/">CBDC</a>.</p><h2 style="text-align: justify;">Why the e-RUPI system and its use cases?</h2><p style="text-align: justify;">For a long time, there have been many instances of people not receiving the subsidies intended for them. Sometimes there also have been instances where the beneficiary in question doesn’t exist at all. And the Indian government had lost many millions in welfare payments alone.</p><p style="text-align: justify;">But, then, the introduction of Aadhar-linked subsidy let the government transfer directly to the beneficiary’s bank account. This was termed as Direct Benefit Transfer. But this also resulted in a roadblock as there are millions of underbanked and unbanked population in India.</p><p style="text-align: justify;">However, the percentage of mobile penetration has been impressive, so this voucher-based system will help the government reach the right beneficiary without any deviations in the system.</p><p style="text-align: justify;">e-RUPI will plug leakages in the welfare delivery system and can be adapted to other welfare schemes such as Mother and Child welfare schemes, drugs and diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertilizer subsidies and so on.</p><p style="text-align: justify;">Given e-RUPI’s mission to plug in the leakages of the welfare system, the use cases can be expanded to many situations. Also, with the people rapidly adopting digital payments, e-RUPI can help bring financial inclusion even to the unbanked. The future and developments of e-RUPI look bright with many miles to go.</p><p style="text-align: justify;"><a href="https://m2pfintech.com/newsletter/"><em><strong>Subscribe</strong></em></a><em><strong> to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.</strong></em></p><p style="text-align: justify;"><em><strong>Follow us on </strong></em><a href="https://www.linkedin.com/company/m2pfintech/mycompany/"><em><strong>LinkedIn</strong></em></a><em><strong> and </strong></em><a href="https://twitter.com/m2pfintech"><em><strong>Twitter</strong></em></a><em><strong> for insightful fintech tales curated for curious minds like you.</strong></em></p>

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