The Reserve Bank of India recently suggested adding PM Vishwakarma Scheme beneficiaries to the Payments Infrastructure Development Fund (PIDF) Scheme.
Suggestions of RBI
The Reserve Bank of India suggested that the beneficiaries of PM Vishwakarma Scheme should add to the Payments Infrastructure Development Fund (PIDF) Scheme.
Additionally, they proposed extending the PIDF Scheme by two more years, until December 31, 2025.
- The PIDF Scheme was launched in January 2021 for three years to incentivize payment acceptance infrastructure deployment, including physical Point of Sale (PoS) and Quick Response (QR) codes, in tier-3 to tier-6 centers, northeastern states, and Union Territories of Jammu & Kashmir and Ladakh.
- The RBI reported that over 2.66 crore new touchpoints have been established under the Scheme through August 2023.
- The RBI plans to encourage the implementation of new modes of payment acceptance, like soundbox devices and Aadhaar-enabled biometric devices, in targeted regions based on industry feedback.
About Payments Infrastructure Development Fund (PIDF)
In January 2021, the Payments Infrastructure Development Fund (PIDF) scheme was introduced aimed to provide financial assistance to eligible entities for setting up, extending, and modernizing payment infrastructure throughout the country.
- Ultimately, the scheme is expected to benefit both consumers and businesses by making digital payments more accessible and convenient.
- This scheme benefits acquiring banks, non-banks, and merchants by reducing overall acceptance infra costs. Its primary goal is to make life easier for citizens in India's tier-3 to tier-6 cities, with a special focus on the north-eastern states.
- The PIDF initiative allows merchants in various sectors, such as transport, hospitality, government payments, fuel pumps, public distribution system (PDS) shops, healthcare, and kirana shops, to accept payments through debit and credit cards.
- The Reserve Bank of India generously funded the PIDF scheme with Rs. 250 crores, while card networks contributed Rs. 95 crores, bringing the total corpus to Rs. 345 crores.
- Additionally, card networks agreed to contribute 0.01 paisa per rupee of transaction annually, and card-issuing banks also made contributions to ensure the fund's continued growth.
- The RBI, with the assistance of card networks, the Indian Banks’ Association (IBA), and the Payments Council of India (PCI), monitored the implementation of the scheme's targets.
- This government initiative is part of India's efforts to promote digital payments and reduce cash transactions.
Prime Minister Narendra Modi launched the PM Vishwakarma Yojana at the India International Convention Center in New Delhi on the occasion of Vishwakarma Jayanti on 17 September 2023.