The wholesale pilot will focus on "settlement of secondary market transactions in government securities," says a statement. The use of a CBDC is expected to make the interbank market more efficient, with settlement in central bank money cutting transaction costs by pre-empting the need for settlement guarantee infrastructure or for collateral to mitigate risk. The RBI is pulling in nine banks - State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC - for the pilot. Other wholesale CBDC pilots, including for cross-border payments, will follow while a retail trial, involving merchants and customers, will launch within a month. The pilots come shortly after the RBI published a CBDC concept note that concludes a digital rupee could reduce costs associated with physical cash management, boost financial inclusion, improve efficiency, and encourage innovation in cross-border payments.