[UPSC Prelims Focus] Payments Infrastructure Development Fund (PIDF)

In This Article


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

About PIDF:

  • Objective:
    • 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.
  • Governance:
    • The fund will be governed through an advisory council but it will be managed and administered by the RBI.
  • Corpus:
    • It has a corpus of Rs. 500 crore in which the RBI has made an initial contribution of Rs. 250 crore. The remaining will come from the card-issuing banks and card networks operating in the country.
  • Recurring contributions
    • The PIDF will also receive recurring contributions to cover operational expenses from card-issuing banks and card networksRBI will also contribute to yearly shortfalls, if necessary.
  • Need :
    • Most of the PoS terminals in the country are concentrated in tier 1 and 2 cities because of the high cost of merchant acquisition and merchant terminalisation.
  • Benefit:
    • It will give a push to digital payments across India.
    • Reduce demand for cash over time.