India has already achieved something most countries only aspire to: hundreds of millions of people brought into the formal banking system in little more than a decade. But having an account is not the same as being fully included. The last mile, where connectivity drops, where subsidies leak, where people still depend on cash, remains unfinished.
That last mile is exactly where central bank digital currency could make its most meaningful contribution. Not as a replacement for what works, but as a new tool for the places and people that existing systems still struggle to reach.
How far India has come
The numbers behind India's inclusion story are remarkable.
Pradhan Mantri Jan Dhan Yojana (PMJDY). As of 19 August 2026, PMJDY accounts stood at 59.09 crore, with aggregate deposits of about ₹3,16,514 crore, according to figures released on the scheme's 12th anniversary. About 55.7% of account holders are women, and about 77.8% of accounts are in rural and semi-urban areas. More than 41 crore RuPay debit cards have been issued.
Financial Inclusion Index. The RBI's FI-Index, which measures access, usage and quality of financial services on a scale of 0 to 100, rose to 67.0 in March 2025, up from 64.2 a year earlier. Usage carries the largest weight in the index, and improvements in usage and quality drove the gains.
UPI. Real-time digital payments have become part of everyday life. NPCI data reported by Business Standard showed a record 24.51 billion UPI transactions in August 2026.
This is extraordinary progress. So why talk about CBDC at all?
The gaps that remain
Inclusion is not a finish line. Several gaps persist.
Connectivity gaps
Most digital payments need a live internet or telecom connection. In remote villages, hilly terrain, basements, crowded markets or during natural disasters, that connection can disappear exactly when people need to pay.
Usage gaps
An account that sits dormant is not inclusion. The FI-Index itself weighs usage most heavily because access without usage delivers little benefit.
Leakage in public transfers
Direct benefit transfers have transformed welfare delivery, but ensuring money is used for its intended purpose, and proving it, remains difficult.
Device and literacy gaps
Not everyone has a smartphone, reliable data, or confidence navigating apps, especially older citizens and people with limited literacy.
Trust gaps
People who have been victims of fraud, or who fear hidden charges, often retreat to cash.
Three CBDC capabilities built for the last mile
The Digital Rupee brings three capabilities that directly address these gaps.
1. Offline payments
At the Global Fintech Fest in October 2025, an offline Digital Rupee was unveiled that allows payments without internet or even telecom connectivity. Value moves directly between two wallets using near-field communication or similar proximity technology, with a tap or QR, making digital money behave much like physical cash.
This matters enormously for:
- Rural markets with patchy signal.
- Transport, like buses and ferries, where connectivity is unreliable.
- Disaster zones, where networks may go down for days.
- Remote border and hill areas.
When digital money works without the network, one of the biggest practical reasons to fall back on cash disappears.
2. Programmability for targeted support
Programmable CBDC can ensure public funds reach their intended purpose.
According to the RBI's Annual Report 2025-26, public distribution system beneficiaries in Gujarat, Puducherry and Chandigarh received food subsidies through programmable CBDC, redeemable only for eligible goods at fair price shops and designated merchants.
This builds on India's earlier experience with e-RUPI, a purpose-specific digital voucher launched in August 2021 that can be redeemed without a smartphone app, card or internet banking.
Programmability can support:
- Food, fertiliser and fuel subsidies that can only be spent on eligible goods.
- Education and health benefits redeemable at approved providers.
- Disaster relief that reaches affected families instantly.
- Automatic return of unspent funds so balances can be redirected to others in need.
3. Identity-linked wallets
India's digital identity infrastructure makes it possible to link wallets to verified identities, with appropriate consent and safeguards. Identity-linked CBDC wallets can:
- Let beneficiaries receive government transfers directly and securely.
- Reduce ghost beneficiaries and duplication.
- Allow simplified onboarding for lower-value wallets.
Crucially, identity linkage must be designed with privacy at the core, in line with India's Digital Personal Data Protection Act and its Rules notified in November 2025.
What last-mile CBDC could look like
Consider three simple scenarios.
A farmer in a low-connectivity village. She receives a programmable fertiliser subsidy in her e₹ wallet. At the local agri-input store, she pays by tapping her phone against the merchant's device, even though neither has signal. The subsidy can only be used for eligible inputs, and the transaction syncs once connectivity returns.
A daily wage worker. His wages arrive in e₹. He pays for groceries and bus fares offline, sends some money home, and uses round-up savings to set aside small amounts each day. Over months, those small amounts grow into a meaningful buffer.
A family after a flood. Relief funds are credited within hours to verified wallets. Local shops accept payments even though mobile towers are damaged. Administrators can see in real time that funds reached the right people.
Design principles for inclusive CBDC
Technology alone does not guarantee inclusion. Design choices decide whether CBDC helps or excludes. International CBDC research and India's own pilots point to several principles.
Keep it simple
Wallets must work on basic devices, in local languages, with minimal steps. Voice, visual cues and assisted modes help first-time users.
Preserve cash-like privacy for small payments
People value the privacy of cash for everyday purchases. Tiered designs can offer greater privacy for low-value transactions while applying stronger checks to larger ones.
Build on existing trust networks
Banks, business correspondents, post offices, cooperatives and local merchants are trusted touchpoints. A two-tier model where regulated institutions distribute CBDC keeps those relationships intact.
Make it interoperable
Merchants should not need separate devices for UPI and e₹. Interoperability with existing QR infrastructure has been an important step.
Protect against fraud
New users are prime targets for scams. Transaction limits, cooling-off periods for unusual transfers, and easy reporting channels are essential.
Respect choice
Programmable restrictions should apply to specific, clearly explained benefits, not to people's general-purpose money.
Beyond payments: inclusion means building wealth
True inclusion is not only about paying and receiving. It is about saving, investing and accessing credit on fair terms.
- Micro-savings. Rounding up everyday transactions into recurring deposits turns small change into disciplined saving.
- Access to safe investments. Platforms like RBI Retail Direct allow individuals to invest directly in government securities.
- Fairer credit. Transaction histories from digital wallets, used responsibly and with consent, can help people with thin credit files demonstrate reliability.
- Transparent fees. Clear, low charges build trust among first-time users.
The risks to watch
A balanced view recognises potential downsides.
- Digital exclusion if systems assume smartphones and literacy.
- Over-programming that limits people's autonomy.
- Privacy erosion if transaction data is not properly protected.
- Fraud targeting new digital users.
- Merchant reluctance if acceptance brings costs without clear benefits.
Each risk is manageable with careful design, strong regulation and continuous listening to users on the ground.
How to tell whether inclusion is really working
It is easy to count wallets opened or transactions processed. It is harder, and more important, to know whether people's financial lives are actually improving. Programmes using CBDC for inclusion should track outcomes like these:
- Active usage, not just accounts. How many wallets are used regularly after the first month?
- Offline reliability. What share of offline payments sync and settle correctly, and how quickly?
- Benefit delivery time. How long does it take for a subsidy or relief payment to reach a beneficiary after approval?
- Leakage reduction. Are programmable benefits reaching eligible goods and eligible people more consistently than before?
- Merchant acceptance. How many small merchants in rural and semi-urban areas accept digital payments, and do they keep accepting them?
- Savings behaviour. Are users building balances, recurring deposits or other savings over time?
- Fraud and complaints. Are new users losing money to scams, and how quickly are grievances resolved?
- Gender and regional gaps. Are women, older citizens and rural users benefiting at the same rate as others?
Measuring these outcomes keeps attention on people rather than on technology, and helps policymakers and providers adjust designs before small problems become large ones.
How E1 envisions inclusive digital finance
Inclusion is at the heart of E1's mission: to create a secure, inclusive and transparent financial platform that empowers every customer, from an individual saver to a global enterprise.
E1 is building CBDC-based infrastructure designed to support last-mile inclusion:
- Direct-to-citizen fund disbursement, designed to move welfare and subsidies directly and instantly to citizens' digital wallets, with programmable conditions ensuring money is used as intended.
- Identity-linked, offline-capable wallets, designed to support Aadhaar-linked CBDC wallets and offline transactions so citizens in rural or low-connectivity areas can receive and spend public funds using basic mobile devices.
- Real-time public auditing, designed so every disbursement is cryptographically logged and unclaimed balances can be automatically redirected.
- Neo banking experiences such as ESavings, designed around zero minimum balance savings for Aadhaar holders and delivered with regulated banks, since E1 is a technology infrastructure provider and not a bank.
- Round-up recurring deposits, designed to turn everyday expenses into steady savings.
- Responsible AI and social scoring, designed to recognise transaction discipline and positive community behaviour so more people can access fair credit, with every model audited for bias and every outcome explainable.
India's inclusion journey proved that scale is possible. The next chapter is depth: money that works offline, reaches the right hands, and helps people build a better future. That is the last mile E1 is building toward.
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