The central bank digital currency (CBDC) is set to revolutionize the payment space, just like the rise of UPI did, according to Debadatta Chand, MD and CEO of Bank of Baroda. He spoke at the IBEX conference, highlighting the potential for CBDC to make transactions easier and more efficient, despite initial doubts. He recalled how UPI’s ease of use led to a shift in small-ticket transactions, and believes CBDC will have a similar impact.
Chand also discussed the rapid digitalization of underwriting processes, with many becoming end-to-end digital. He cited the success of digital agri-credit delivery and plans to extend this to MSMEs and other areas. He emphasized the importance of partnership between banks and tech companies to deliver personalized services, omnichannel integration, and data analytics, while prioritizing cybersecurity and artificial intelligence.
Additionally, Chand emphasized the need for banks to reduce their cost-to-income ratios through technological advancements and AI models. He advocated for banks to leverage new technologies to decrease costs, for example, by adjusting business processes to achieve efficiency gains. Overall, Chand and Bank of Baroda are committed to working together to create a seamless and efficient payment environment with the advent of CBDC.