Centre Prohibits Banks, System Providers From Charging For UPI Transactions Up To ₹2,000

The Central government has prohibited banks and system providers from imposing charges on UPI transactions of up to Rs 2,000.

Charges prohibited under law

As per Section 10A of the Payment and Settlement Systems Act, 2007 (51 of 2007), the Central Government prohibits banks and system providers from imposing, directly or indirectly, any charges on a person making or receiving payments using debit cards powered by RuPay and UPI transactions up to Rs 2,000, as per the Ministry of Finance.

MDR proposal for larger transactions

In August, the government opened the door to introducing a nominal Merchant Discount Rate (MDR) on a limited set of UPI merchant transactions above a certain threshold, while assuring that consumers and person-to-person payments will continue to remain free.

The government had said the amendment should be seen as part of its broader effort to make India's digital payment infrastructure sustainable, competitive and capable of supporting the country's expanding digital economy.

Ministry rejects external influence claims

The Ministry had also rejected reports suggesting that external influences were behind the proposed policy changes, calling such claims "unfounded, completely false and misleading."

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