The central government has issued a strict directive to banks and system providers prohibiting the charging of any fees for UPI transactions up to 2000 rupees.
According to the Ministry of Finance, this legal restriction was introduced in accordance with Section 10A of the Payment and Settlement Systems Act of 2007. This rule ensures that no direct or indirect charge will be levied on any person making or receiving payments using debit cards or UPI up to 2000 rupees.
This step has been taken to ensure the smooth functioning of the digital economy. Earlier in August, the government hinted at the possible introduction of a small Merchant Discount Rate (MDR) for certain UPI transactions by merchants exceeding the set limit. At the same time, the government assured the public that peer-to-peer payments would remain completely free.
The government emphasized that this change is part of broader efforts to ensure the sustainability, competitiveness, and support of India's growing digital economy. The Ministry of Finance firmly refuted reports claiming that external forces were behind the proposed changes, calling such statements unfounded, false, and misleading. The government clearly stated that strengthening the country's digital infrastructure remains its primary objective.