Brokerages seek MDR for capital market transactions to be limited to 2 basis points
At an MDR rate of 2 per cent, the ₹300 cap would apply only to transactions of around ₹15 lakh, while UPI transaction limits are around ₹5 lakh for relevant transactions
Discount brokerage firms have approached SEBI to modify the proposed MDR framework for UPI transactions, suggesting a reduced rate of around 2 basis points with a transaction fee cap of ₹2-5. The brokers argue that this structure would prevent additional costs from being passed to customers and keep the impact manageable for all participants.
Industry sources note that the proposed ₹300 cap is largely irrelevant for capital-market transactions, as it would only be reached at a transaction value of around ₹15 lakh under an MDR rate of 2%. The brokers also want the threshold for MDR-free transactions to be increased from ₹2,000 to ₹20,000, reflecting the larger ticket sizes in capital-market transactions.
Around 80% of these transactions are lumpsum payments, with nearly 95% driven by UPI. Within UPI transactions, around 70% exceed ₹2,000, potentially subject to MDR under the current threshold. The firms also seek an exclusion of customer fund movements, arguing that applying MDR to these payouts could result in brokers incurring costs without earning revenue on the funds returned.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
