SRINAGAR: The government has barred banks and payment system providers from levying direct or indirect charges on Unified Payments Interface (UPI) transactions of up to Rs 2,000, according to a Finance Ministry gazette notification.
The notification also covers payments of up to Rs 2,000 made through RuPay-powered debit cards, classifying both modes as “electronic modes of payment” under the Payment and Settlement Systems Act.
It states that no bank or system provider can impose any charge on a person making or receiving payments through these modes.
The Finance Ministry issued the notification to clarify the provisions governing charges on UPI transactions following concerns over the possibility of fees being introduced after a recent amendment to the Payment and Settlement Systems Act, 2007.
The government had last month clarified that consumers would not be charged for making payments through UPI. It said any future merchant discount rate (MDR) would apply only to selected transactions above a specified threshold.
The ministry also said all person-to-person (P2P) UPI transactions would remain free and there would be no blanket MDR on merchants.
According to the earlier clarification, any such charges would also be substantially lower than the MDR applicable to debit and credit card transactions.
