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RBI Governor Malhotra Says Small MDR Fee Won't Hurt UPI Volumes
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CNBC TV18•07-10-2026, 14:39
RBI Governor Malhotra Says Small MDR Fee Won't Hurt UPI Volumes
- •RBI Governor Sanjay Malhotra stated that a small fee in the form of merchant discount rate will not significantly impact UPI transaction volumes.
- •The government recently allowed charging an MDR fee of 0.4 percent on transactions exceeding 2,000 rupees.
- •Malhotra announced a rate hike, ruling out rate cuts for now, while projecting continued strong credit growth for banks.
- •The central bank remains confident in macroeconomic fundamentals, despite a temporary dip in external flows and current account pressure.
Key Questions Answered
The government allowed charging a Merchant Discount Rate (MDR) where transactions above ₹2,000 attract a fee of 0.4%. P2M UPI transactions below Rs 2,000 continue to remain free for merchants, and all UPI transactions remain free for users.
RBI Governor Sanjay Malhotra stated that levying a small merchant discount rate fee will not have a major impact on UPI transaction volumes and that the central bank does not see any drop in volumes.
RBI Governor Sanjay Malhotra noted that banks' credit growth will continue to be strong and aid broader economic activity. While conscious of potential risks to asset quality at non-bank lenders amid high liquidity, the central bank does not expect any such adverse eventuality to play out.
