Centre Prohibits Banks, System Providers From Charging For UPI Transactions Up To ₹2,000
The Central government has prohibited banks and system providers from imposing charges on UPI transactions of up to Rs 2,000. Charges prohibited under law As per Section 10A of the Payment and Settlement Systems Act, 2007 (51 of 2007), the Central Government prohibits banks and system providers from imposing, directly or indirectly, any charges on a person making or receiving payments using debit…
The Indian government has prohibited banks and system providers from charging fees on UPI transactions up to ₹2,000. This prohibition is mandated by Section 10A of the Payment and Settlement Systems Act, 2007, according to the Ministry of Finance. In August, the government had indicated the possibility of introducing a small Merchant Discount Rate (MDR) on specific UPI merchant transactions exceeding a certain limit, while emphasizing that consumer and person-to-person payments would remain fee-free.
The government has framed this amendment as part of its strategy to ensure the long-term viability, competitiveness, and scalability of India's digital payment ecosystem. The Ministry has also dismissed allegations of external interference, labeling such accusations as "unfounded, completely false and misleading."
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