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Small UPI Fee Won't Hurt Transaction Volumes Says RBI Governor
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News18•07-10-2026, 14:49
Small UPI Fee Won't Hurt Transaction Volumes Says RBI Governor
- •RBI Governor Sanjay Malhotra stated that a small merchant discount rate on certain UPI transactions will not materially affect transaction volumes.
- •The government recently permitted an MDR of 0.4 percent on merchant transactions exceeding Rs 2,000 under specific rules and caps.
- •Malhotra announced a 25-basis-point increase in the repo rate while indicating that a rate cut is not expected immediately.
- •Banks successfully raised nearly $13.3 billion from the Indian diaspora through the special FCNR(B) deposit mobilisation scheme.
- •The RBI expects current account pressures from global headwinds to be temporary with the Balance of Payments soon returning to surplus.
Key Questions Answered
Reserve Bank of India Governor Sanjay Malhotra stated that the introduction of a small merchant discount rate on certain UPI transactions is unlikely to materially affect transaction volumes, noting that no drop in volumes has been seen.
Under the new framework, merchant transactions exceeding Rs 2,000 can attract a merchant discount rate of 0.4 per cent, subject to applicable rules and caps.
RBI Governor Sanjay Malhotra announced a 25-basis-point increase in the repo rate while signaling that an immediate rate cut is not planned, though bank credit growth is still expected to remain strong to support broader economic activity.
