The Reserve Bank of India (“RBI”) on June 5, 2020 announced creation of a Payments Infrastructure Development Fund (“PIDF”) of INR 500 crores. This would boost the deployment of Point of Sale (“PoS”) devices in tier-3 to tier-6 centres and north eastern states. It would also help in enhancement of PoS infrastructure (both physical and digital modes) in these underserved areas.
In this regard, the initial funding of INR 250 crores would be provided by the RBI. The remaining amount of INR 250 crores would be contributed by card issuing banks and card network companies. Also, contributions would be provided by banks and card network companies in the PIDF to cover operational expenses. The RBI may further contribute towards the yearly shortfalls, if required. The PIDF would be governed through an Advisory Council and managed and administered by the RBI.
This step would encourage the development of digital payments ecosystem in the underserved areas of the country. The deployment of PoS devices would support businesses to accept payment through digital/ e-modes, which in turn would help in reduction in cash transactions.