Payment Infrastructure Development Funds
The Reserve Bank of India recently announced operational guidelines to Payment Infrastructure Development Funds. The main aim of the funds is to deploy more digital payment infrastructure across tier-3 to tier-6 centres and in the north eastern states.
What are the guidelines issued by RBI?
- The Central Bank has constituted an advisory council under the chairmanship of B P Kanungo. The advisory council will basically govern the funds. On the other hand, the funds will be administered and managed by RBI.
- The fund is to be operational for two years, 2021 and 2022.
- The fund has a corpus of 345 crores of rupees. Of this, 250 crores will be contributed by RBI and 95 crores of rupees by card networks operating in India.
What is the main function of the advisory council?
The advisory council will plan a transparent mechanism to acquire banks, non-banks in different locations. This will help to increase the banking infrastructure of the country.
Who are the primary targets of the scheme?
Merchants providing essential services such as hospitality, transport, health care facilities, public distribution systems.
Why is Payment Infrastructure Development Fund needed?
The payment ecosystem in the country has evolved with wide range of options such as mobile phones, bank accounts, cards, etc. It is essential to provide further fillip to the digitization of payment system to provide impetus to accept infrastructure in the country accordingly. The enhanced ability of Point-of-Sale infrastructure will reduce the cash demand over time. By 2021, there will be more than five million active Point-of-sale by 2021.
What is Acceptance Development Fund?
The Acceptance Development Fund was proposed by the RBI in 2019 to develop card acceptance infrastructure such as swipe machines in Tier III and Tier VI cities. The fund will ensure growth of card acceptance infrastructure such as swipe machines in the country especially in Tier III and Tier VI cities.
Category: Economy & Banking Current Affairs