International Research Journal of Education and Technology

Retail Central Bank Digital Currency brings a direct liability of the central bank into the household portfolio and questions the stability of the bank deposit. This research paper assesses the issue of whether scaling the Digital Rupee creates disintermediation risk in India. Based on March 2025 banking aggregates, with the deposits being ₹225.21 trillion and the Digital Rupee balances being negligible, a calculated balance sheet framework is built. The model differentiates between steady state substitution and amplification of stress and includes holding limits, inclusion offsets, and funding replacement capacity. Findings show that substitution at a cost from 0 up to 1 percent is economically insignificant, however beyond 1 percent, substitution is nonlinear and rises with adoption of 3-5 percent under pressure. Holding limits contain extreme results, while inclusion contains relative widespread influences but decays with scale. Disintermediation risk is a conditional and interaction-based risk that only arises when scale and stress are in line.

Keywords: Central Bank Digital Currency, Digital Rupee, Bank Disintermediation, Financial Stability, Stress Amplification, Nonlinear Risk.