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UPI MDR Deferment Until After Diwali Shows Clear Implementation Intent Says Former SBI Chief Khara
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CNBC TV18•13-10-2026, 15:06
UPI MDR Deferment Until After Diwali Shows Clear Implementation Intent Says Former SBI Chief Khara
- •Former SBI chairman Dinesh Khara stated that delaying the UPI merchant discount rate until after Diwali signals a clear intent to proceed with the policy rather than abandon it
- •The additional time provides banks merchants fintech firms and other stakeholders an opportunity to prepare for the transition and address operational challenges
- •NPCI plans to implement MDR on select person-to-merchant UPI transactions exceeding two thousand rupees following the festive season
- •Khara emphasized that MDR is essential for enabling ecosystem participants to invest in robust infrastructure and cybersecurity measures
- •Abizer Diwanji of Neostrat Advisors also supported the long-term rationale describing the fee as a facilitation fund for resilient technology rather than a tax
Key Questions Answered
The NPCI deferred the implementation of the merchant discount rate (MDR) to accommodate merchant concerns during the heavy festive shopping season and to give stakeholders, banks, and fintech firms extra time to prepare their operational systems.
The upcoming merchant discount rate (MDR) will apply specifically to select person-to-merchant (P2M) UPI transactions that exceed ₹2,000, while regular peer-to-peer and small retail transactions remain free.
The proposed MDR aims to build a facilitation fund that enables payment ecosystem participants to continuously invest in vital infrastructure, fraud prevention, and cybersecurity measures.
