CBDC could be used for collection of micro-loans, says RBI official

A senior RBI official has suggested that Central Bank Digital Currency (CBDC) could be used for the collection of micro-loans. The official pointed out the potential benefits of using CBDCs for small-value loans, including increased efficiency, lower transaction costs, and enhanced financial inclusion. The use of CBDCs could enable seamless, real-time payments for micro-loans, offering a viable alternative to traditional banking systems. This development could open new avenues for financial inclusion, particularly in underserved rural areas.