RBI sets up Payments Infrastructure Development Fund to boost digitisation

The Reserve Bank of India has announced the creation of a Payments Infrastructure Development Fund (PIDF) to encourage acquirers to deploy Points of Sale (PoS) infrastructure (both physical and digital modes) in tier-3 to tier-6 centres and northeastern states.

"Over the years, 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 the digitisation of payment systems, it is necessary to give impetus to acceptance infrastructure across the country, more so in underserved areas," the central bank said.

The Reserve Bank of India will make an initial contribution of Rs 250 crore to the fund, covering half the fund, and the remaining contribution will be done by card-issuing banks and other card networks operating in the country.

Also read: Rs 2 lakh crore blow to banks if interest during loan moratorium waived, RBI cautions SC

The PIDF will also receive recurring contributions to cover operational expenses from card-issuing banks and card networks, the RBI circular says. "The Reserve Bank of India will also contribute to yearly shortfalls, if necessary. The PIDF will be governed through an Advisory Council and managed and administered by Reserve Bank," the central bank said.

Also read: Consumer confidence plunges in May; GDP likely to contract by 1.5% in FY21, says RBI survey

In a separate development, the central bank, in its recent survey, has said the consumer confidence in the country collapsed to record low in May amid uncertainty due to COVID-19 outbreak. The RBI said expectation on the general economic situation and employment scenario also turned pessimistic, indicating a bumpy road ahead for the Indian economy.

"Consumer confidence plunged in May, with the Current Situation Index (CSI) hitting historic low and the one year ahead Future Expectations Index (FEI) also recording a sharp fall, entering the zone of pessimism, as per the Consumer Confidence Survey (CCS)," the central bank said.

Also Read: Interest or Interest-free? SC asks Centre, RBI on EMI moratorium