Payments Infrastructure Development Fund (PIDF) created by RBI
Part of: GS-Prelims and GS-III – Economy, E-commerce
- The RBI has announced the creation of a Payments Infrastructure Development Fund (PIDF) with an initial contribution of ₹250 crore.
- It is created to encourage the adoption of Points of Sale (PoS) machines by businesses in tier-3 to Tier-6 centres and Northeastern States.
- The POS machines allow businesses to accept e-payments, thereby reducing the need to deal in cash.
- The PIDF will be governed through an Advisory Council.
- It will be managed and administered by RBI.
- RBI will make an initial contribution of ₹250 crore which will cover half of the fund.
- The remaining contribution will be from card-issuing banks and card networks operating in the country.
- RBI will also contribute to yearly shortfalls, if necessary.
- It is being set up according to the recommendations of the report of the committee on deepening of digital payments, chaired by Nandan Nilekani.
- Most of the POS terminals in the country are concentrated in tier-1 and tier-2 cities and towns only.
- Other regions have been left out. Thus, there was need to create such a kind of fund for such cities.