Reserve Bank of India Governor Sanjay Malhotra has reassured that no charges are imminent on UPI transactions, amid ongoing legislative discussions that could introduce merchant discount rates for payments above ₹2,000.
Reserve Bank of India Governor Sanjay Malhotra has sought to calm a wave of speculation over possible charges on Unified Payments Interface transactions, saying it is too early to draw conclusions while the payment system is still considering wider amendments. His remarks come after reports that the Finance Ministry has introduced legislation that could open the door to a merchant discount rate, or MDR, on certain digital payments above ₹2,000.
According to reporting by Business Standard, The Economic Times, The Times of India and NDTV, Malhotra said in October 2025 that there was no proposal before the central bank to levy charges on UPI transactions. He also stressed that UPI remains free for users, though he argued that the costs of running digital payment systems must ultimately be borne by someone if the network is to remain viable over the long term.
The latest debate has centred on whether any change would affect ordinary consumers or only merchants. The Financial Ministry’s proposed amendments are being described as aimed at banks and payment providers rather than individual users, with the charge potentially applying to merchant transactions above ₹2,000. If implemented in that form, everyday person-to-person payments would remain exempt, and routine purchases would not be affected.
That distinction matters because much of the public concern has been driven by social media posts suggesting all UPI payments could be taxed. In practice, the issue is more technical: MDR is a fee paid by merchants to banks and payment firms for processing digital payments. Sources cited in the reports say most UPI transactions are below ₹2,000, which would limit any impact to a relatively small share of merchant payments even if the proposal were eventually adopted.
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