RBI creates ₹500 cr fund to boost digital payments in small towns, Northeast states

Mumbai: The Reserve Bank on Friday announced a Rs 500 crore payments infrastructure development fund (PIDF) for promoting digital payments and deployment of points of sale (PoS) equipment in small towns and north-eastern states.

The RBI will make an initial contribution of Rs 250 crore to the PIDF covering half of the fund and the rest would be financed by card issuing banks and card networks.

In a statement, the central bank said that over the years, payments ecosystem in the country has evolved with a wide range of options such as bank accounts, mobile phones, and cards.

To provide further fillip to digitisation of payment systems, it is necessary to give impetus to acceptance infrastructure across the country, more so in underserved areas, it added.

"The Reserve Bank will make an initial contribution of Rs 250 crores to the PIDF covering half the fund and remaining contribution will be from card issuing banks and card networks operating in the country," the central bank said.

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 statement said.

The PIDF will be governed through an Advisory Council and managed and administered by Reserve Bank.

Beginning June 3, the RBI has started publishing data on volume and value of transactions undertaken in payments systems, like NEFT, RTGS, AePS, CTS, IMPS, NACH and UPI as well as the position of cash withdrawal transactions using ATMs and Banking Correspondents.

Post demonetisation, both the government as well as the RBI has been pushing digital payments.