From UPSC perspective, the following things are important :
Prelims level : Payment Infrastructure Development fund
Mains level : Paper 3- Digital payment in India
The RBI has created a Payments Infrastructure Development Fund (PIDF) with an outlay of Rs. 500 Cr.
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
Payments Infrastructure Development Fund (PIDF)
- PIDF aims to encourage acquirers to deploy Points of Sale (PoS) infrastructure — both physical and digital modes in tier-3 to tier-6 centres and north eastern states.
- The setting of PIDF is in line with the measures proposed by the vision document on payment and settlement systems in India 2019-2021.
- It is also in line with the RBI’s proposal to set up an Acceptance Development Fund which will be used to develop card acceptance infrastructure across small towns and cities.
- The PIDF will be governed through an Advisory Council and managed and administered by RBI.
- It will also receive recurring contributions to cover operational expenses from card-issuing banks and card networks.
- RBI will also contribute to its yearly shortfalls, if necessary.
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 digitization of payment systems, it is necessary to give impetus to acceptance infrastructure across the country, more so in under-served areas.