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Renormalization is one of the deepest ideas in physics, yet its exact implementation in any interesting problem is usually very hard. In the present work, following the approach by Glazek and Maslowski in the flat space, we will study the exact renormalization of the same problem in a nontrivial geometric setting, namely in the two dimensional hyperbolic space. Delta function potential is an asymptotically free quantum mechanical problem which makes it resemble nonabelian gauge theories, yet it can be treated exactly in this nontrivial geometry.