{
  "id": 7815749,
  "title": "UPI MDR may squeeze low-cost broking as fund transfers attract charge",
  "url": "https://urgent.news/2026/09/16/upi-mdr-may-squeeze-low-cost-broking-as-fund-transfers-attract-charge",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-16T15:19:06.000Z",
  "source": {
    "name": "Hindu BusinessLine",
    "slug": "hindu-businessline",
    "url": "https://www.thehindubusinessline.com/markets/upi-mdr-may-squeeze-low-cost-broking-as-fund-transfers-attract-charge/article71472948.ece"
  },
  "original_language": "en",
  "account": "The proposed 0.02 per cent Merchant Discount Rate (MDR) on UPI transactions in the capital markets may impose an unintended cost on stockbrokers, as it could apply when clients transfer money into their brokerage accounts without executing a trade. Brokers argue that such transfers are merely the movement of clients' own funds for investment or trading purposes, not a commercial transaction that generates revenue for the broker. Ajay Kejriwal, Director at Choice Broking, stated that charging a broker 0.02 per cent on these transfers, even if the client eventually doesn't trade, creates a cost without corresponding brokerage revenue. Zerodha's Nithin Kamath added that there is no guarantee the transferred funds will result in a transaction, and brokers cannot compel clients to trade after receiving the funds. For instance, if 10,000 customers make 50 UPI transfers of ₹2 lakh each in a month without trading, the broker could incur around ₹2 crore in UPI costs at the proposed MDR. The impact could be more severe for discount brokers, where brokerage on some transactions is already minimal or nonexistent. Ajay Kejriwal emphasized that the ₹300 cap does not address the core issue and that the government should clarify the treatment of transfers into a client's brokerage account. Kamath suggested a more reasonable cap of ₹5-10 per transaction. While the impact may be limited for retail investors, the 0.02 per cent rate for capital-market transactions, capped at ₹300, is significantly lower than the standard MDR. UPI-based SIP payments through AutoPay would fall outside this framework.",
  "summary": "Brokers seek clarity on applicability of client-to-broker transfers even when no trade is executed",
  "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."
}