Indian Economy and Issues Relating to Planning, Mobilization, of Resources, Growth, Development and Employment



Recently, the Reserve Bank of India (RBI) has announced the operationalisation of the Payment Infrastructure Development Fund (PIDF) scheme.


  • Develop payment acceptance infrastructure in tier-3 to tier-6 cities (centres), with a special focus on the north-eastern states of the country.
  • The fund will be operational for three years effective from 1st January, 2021 and may be extended for two more years.
  • An Advisory Council (AC) under the chairmanship of RBI deputy governor BP Kanungohas been constituted for managing the PIDF.
  • The PIDF presently has a corpus of Rs. 345 crore, with Rs. 250 crore contributed by the RBI and Rs. 95 crore by the major authorised card networks in the country.
  • The authorised card networks shall contribute in all Rs. 100 crore.
  • Besides the initial corpus, PIDF shall also receive annual contributions from card networks and card issuing banks.


  • The focus shall be to target those merchants who are yet to be terminalised (merchants who do not have any payment acceptance device).
  • Merchants engaged in services such as transport and hospitality, government payments, fuel pumps, public distribution system (PDS) shops, healthcare and kirana shops may be included, especially in the targeted geographies.
  • The fund will be used to subsidize banks and non-banks for deploying payment infrastructure, which will be contingent upon specific targets being achieved.
  • The Advisory Council will devise a transparent mechanism for allocation of targets to acquiring banks and non-banks in different segments and locations.
  • The implementation of targets shall be monitored by the RBI with assistance from card networks, the Indian Banks’ Association (IBA) and the Payments Council of India (PCI).
  • Acquiring banks (also acquirers or merchant banks) are financial institutions processing debit and credit card transactions on behalf of a merchant or business.
  • Tentatively, tier-3 and tier-4 centres will be allocated 30% of the acceptance devices, tier-5 and tier-6 centres will get 60% and the north eastern states will be given 10%.
  • Multiple payment acceptance devices and infrastructure supporting underlying card payments, such as physical Point of Sale, mobile Point of Sale, General Packet Radio Service (GPRS) , Public Switched Telephone Network (PSTN) and QR code-based payments will be funded under the scheme.


  • A subsidy of 30% to 50% of cost of physical PoS and 50% to 75% subsidy for Digital PoS shall be offered.
  • The subsidy shall be granted on a half-yearly basis, after ensuring that performance parameters are achieved, including conditions for ‘active’ status of the acceptance device and ‘minimum usage’ criteria, as defined.



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