From UPSC perspective, the following things are important :
Prelims level : PIDF Scheme
Mains level : Digital banking facilitation measures
The RBI has announced operational guidelines to create digital payments acceptance infrastructure across Tier III to Tier VI regions in India.
Possible prelims question:
Q. Which of the following is the major aim of Payments Infrastructure Development Fund (PIDF) recently created by the Reserve Bank of India (RBI)?
a) Promotion of UPI payments
b) Deploying Points of Sale (PoS) infrastructure
c) Creation of digital wallets
d) All of the above
- The scheme was first announced in June last year to encourage fintech companies and banks to deploy point of sale (PoS) infrastructure across the country to improve the penetration of card-based and other digital payments.
- The primary beneficiaries will be merchants providing essential services, such as transport and hospitality, government payments, fuel pumps, healthcare facilities, and groceries.
- Amid the rapid rise in the volume of payments through the UPI network, the RBI is taking steps to further widen the use of digital payments in the country.
- The fund will be operational for three years from January 1, 2021, and would help subsidise banks and non-banks for the deployment of payments, subject to them achieving specific targets.
Why need PIDF?
- Over the years, the payments ecosystem in the country has evolved with a wide range of options such as bank accounts, mobile phones, cards, etc.
- To provide further fillip to the digitization of payment systems, it is necessary to give impetus to acceptance infrastructure across the country, more so in under-served areas.