Context

• Recently, the Reserve Bank of India (RBI)has announced the creation of a Rs. 500-crore Payments Infrastructure Development Fund (PIDF).

About the Fund

• This fund has been created to encourage acquirers to deploy point of sale (PoS) infrastructure, both physical and digital, in tier-3 to tier-6 centres and north eastern states.
• The fund will be governed through an advisory council but it will be managed and administered by the RBI.
• The PIDF will also receive recurring contributions to cover operational expenses from card issuing banks and card networks.
• The Reserve Bank will also contribute to yearly shortfalls, if necessary.
• The setting up of this fund is in line with the recommendations of the report of the committee on deepening of digital payments, chaired by Nandan Nilekani.
• This move is expected to make the economics more favorable and will significantly increase the merchant base accepting digital payments.