{
  "id": 13950292,
  "title": "IIT-B report wants UPI MDR cut; says banks should forgo their share",
  "url": "https://urgent.news/2026/10/12/iit-b-report-wants-upi-mdr-cut-says-banks-should-forgo-their-share",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-12T11:30:00.000Z",
  "source": {
    "name": "Times of India",
    "slug": "times-of-india",
    "url": "https://timesofindia.indiatimes.com/business/india-business/iit-bombay-report-recommends-cutting-upi-mdr-from-0-4-to-0-08-says-banks-should-give-up-their-share-as-they-earned-rs-4-85-lakh-crore-from-casa-deposits-in-fy26/articleshow/134885653.cms"
  },
  "original_language": "en",
  "account": "A report from IIT-Bombay has called for reducing the Merchant Discount Rate (MDR) on UPI transactions from 0.40% to 0.08%. Professor Ashish Das and former RBI official Pragya Das argue that third-party application providers and payment service providers, primarily banks, should receive compensation for the services they provide. The study suggests setting the MDR share for TPAPs at 0.06% and keeping it unchanged for PSPs at 0.02%. Banks currently earn a large and disproportionate income from UPI transactions, with a net interest margin of over Rs 4.85 lakh crore from CASA deposits. The report urges banks to use this revenue for improving the UPI ecosystem instead of relying on MDR revenue sharing. It also questions the reasonableness of high-value transaction charges on UPI payments and proposes introducing a digital payment fee on online merchant transactions. The authors urge the RBI and government to treat UPI as an essential service for banks and maintain generous fee-free ATM withdrawal allowances. They also recommend continuing the Payments Infrastructure Development Fund and limiting credit card MDR to UPI transactions.",
  "summary": "The study recommends setting the MDR share for TPAPs at 0.06%, lower than the 0.08% proposed by the National Payments Corporation of India (NPCI), while keeping the PSP share unchanged at 0.02%. Under the existing arrangement, banks that issue and acquire transactions collectively receive the bulk of the revenue, with a 70% share split between them",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}