NSE CEO Ashish Chauhan Says UPI MDR Charges May Hit Volumes In Near Term

The National Stock Exchange (NSE) expects the introduction of Merchant Discount Rate (MDR) charges on higher-value UPI transactions to have a limited short-term impact on digital payment volumes, with activity likely to recover over time.

"There may be some impact initially on transaction volumes only in the short term due to MDR charges above Rs 2,000. After some time it's likely to normalise," NSE Managing Director and Chief Executive Officer Ashishkumar Chauhan said as cited by Moneycontrol.

The government has recently allowed the possibility of MDR charges on UPI transactions above ₹2,000, while keeping smaller transactions exempt from such fees. Chauhan said the impact on users and transaction activity is expected to be temporary.

NSE IPO sees strong anchor investor demand

Chauhan’s comments come ahead of NSE’s much-awaited initial public offering (IPO), which is scheduled to open on September 17. The IPO consists entirely of an offer for sale of 12.64 crore shares, with the price band fixed at ₹1,700-1,785 per share.

The issue is expected to raise more than ₹22,000 crore. Since the IPO does not include a fresh share issue, NSE itself will not receive proceeds from the offering.

Chauhan said interest from anchor investors has been stronger than anticipated, especially after the size of the issue was reduced.

"Demand from anchor investors for NSE IPO is unexpectedly large ... because the book size has shrunk, demand is much larger," he said.

"Every group like local MFs has to be allotted specific amount. Anchor book is pretty large, more than we thought," Chauhan added.

NSE expands technology capacity

The exchange is also strengthening its technology infrastructure to manage rising market activity. NSE currently has an order-processing capacity of 15 lakh orders per second, which could increase to 5 crore orders per second with further technological upgrades.

Chauhan said the exchange handles around 2,200 crore orders and 30 crore trades every day, while its investor base has reached 13.2 crore unique investors.