In order to encourage the deployment of Points of Sale (PoS) infrastructure in smaller cities and towns, the Reserve Bank of India (RBI) has initiated with Rs 500-crore ($66 million) Payments Infrastructure Development Fund (PIDF with an initial contribution of Rs 250 crore . The remaining amount will be contributed by card issuing banks and card networks working in the country.
The fund will encourage business people from Tier-3 to Tier-6 centers and in the northeastern states to adopt Point of Sale (POS) machines (both physical and digital modes).
Fund will continue to receive other capital at regular intervals:
- PIDF will continue to receive other cash contributions from card issuing banks and card networks at regular intervals to meet operating expenses.
- RBI will also continue to meet the capital deficit on an annual basis, if required.
- The PIDF will operate under the supervision of the RBI & will be run by an Advisory Council.
What is the need?
Over time many options have come up in the country’s payment ecosystem. These include bank accounts, mobile phones, cards, etc. There is a need to promote the development of acceptance infrastructure across the country to further promote the digitization of payment systems. So, there is an even greater need to promote it, especially in backward areas.
About Reserve Bank of India (RBI):
Headquarters– Mumbai, Maharashtra
Formation– 1 April 1935
Governor– Shaktikanta Das
Deputy Governors– 4 (Bibhu Prasad Kanungo, Mahesh Kumar Jain, Michael Debabrata Patra, one is yet to be appointed).