RBI to launch Payment Infra Fund

RBI to launch Payment Infra Fund


Debit Card Machine
  • Reserve Bank of India has announced about creating Rs. 500 crore payments infrastructure development fund (PIDF) in order to encourage acquirers to deploy points of sale (PoS) Infrastructure which would be both physical and digital modes and would cover Tier 3 to Tier 6 centrs and also Northeastern States.
  • RBI will chip in with an initial contribution of Rs. 250 crore and the remaining contribution would come from card-issuing banks and card networks which operate in the country. The PIDF will also receive its recurring contributions from Banks and card networks which would cover its operational expenses.  Also, RBI proposes to contribute to yearly shortfalls if required.


  1. RBI has felt that ecosystem in the country has advanced during these years with a wide range of options like Bank Account, Mobile Phones, Cards etc. In order to augment the options and to provide further boost to digitalization it has become necessary to give a push to acceptance infrastructure in the country especially in the underserved areas.
  2. The PIDF is expected to be governed through an advisory council and will be managed and administered by RBI.

Recommendations of  Committee headed by Nandan Nilekani

  1. The setting up of this fund is in tune with the recommendations of the report of the committee on deepening of digital payments, submitted by committee headed by Nandan Nilekani.
  2. The report had recommended that development fund must be accepted in order to cover some of the costs which are associated with payments business, which otherwise is a loss making one for banks.
  3. To quote an example, one of the recommendations of the report was to reduce the interchange on card by 15 bps (basis points) or 0.15%.
  4. Also, an additional 5 bps should be placed in an acceptance development fund by the issuer and the RBI could opt to match the contribution.
  5. The committee further added that this would increase the incentive for acquirers to sign up merchants.

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