RBI unveils guidelines for Payment Infrastructure Development Fund

News: Reserve Bank of India(RBI) has announced operational guidelines for the Payments Infrastructure Development Fund (PIDF) scheme.


  • Objectives of the Fund:
    • To increase the number of acceptance devices multi-fold in the country.
    • To benefit the acquiring banks / non-banks and merchants by lowering overall acceptance infrastructure cost.
    • To increase payments acceptance infrastructure by adding 30 lakh touch points – 10 lakhs physical and 20 lakh digital payment acceptance devices every year.
  • Purpose: The fund will be used to subsidize banks and non-banks for deploying payment infrastructure which will be contingent upon specific targets being achieved.
  • Accountability: Acquirers of the subsidy shall submit quarterly reports on the achievement of targets to the RBI.
  • Targets:
    • The primary focus shall be to create payment acceptance infrastructure in Tier-3 to Tier-6 centres.
    • North Eastern states of the country shall be given special focus.
    • The fund will also focus on those merchants who are yet to be terminalised(merchants who do not have any payment acceptance device).
    • Merchants engaged in services such as transport and hospitality, government payments, public distribution system(PDS) shops, healthcare may be included especially in targeted geographies.
  • Duration of Fund: The fund will be operational for three years effective from 1st January, 2021 and may be extended for two more years.
  • Funding::It has a corpus of Rs. 345 crore with Rs. 250 crore contributed by the RBI and Rs. 95 crore by the major authorised card networks in the country. The authorised card networks shall contribute in all Rs. 100 crore. Besides the initial corpus, PIDF shall also receive annual contributions from card networks and card issuing banks.
  • Advisory Council: An Advisory Council (AC) under the chairmanship of RBI deputy governor BP Kanungo has been constituted for managing the PIDF. The council will devise a transparent mechanism for allocation of targets to acquiring banks and non-banks in different segments and locations.
  • Monitoring: Implementation of targets under PIDF shall be monitored by RBI’s Regional Office Mumbai with assistance from card networks, the Indian Banks’ Association, and the Payments Council of India.

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