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RBI Governor Sanjay Malhotra Says UPI Volumes Will Not Drop Despite MDR Fee
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Moneycontrol•07-10-2026, 13:47
RBI Governor Sanjay Malhotra Says UPI Volumes Will Not Drop Despite MDR Fee
- •RBI Governor Sanjay Malhotra stated that levying a small merchant discount rate fee will not majorly impact UPI transaction volumes.
- •Transactions above Rs 2,000 will now attract an MDR fee of 0.4 percent as permitted by the government last month.
- •Malhotra announced a rate hike and clarified that a rate cut is currently off the table.
- •The RBI remains confident that banks will maintain strong credit growth and prudently deploy diaspora funds.
- •Malhotra noted that pressure on the current account is temporary and expects the Balance of Payments to return to surplus soon.
Key Questions Answered
RBI Governor Sanjay Malhotra stated that levying a small fee in the form of merchant discount rate (MDR) will not have a major impact on UPI transaction volumes. He noted that the central bank does not currently see any drop in volumes.
Under the framework allowed by the government, UPI transactions above Rs 2,000 will attract a merchant discount rate (MDR) fee of 0.4 per cent.
Malhotra stated that banks' credit growth will continue to be strong going forward to aid broader economic activity. He also mentioned that system liquidity will not remain in such a high surplus as seen in recent weeks for a very long time.
