The central government on Monday announced that banks cannot impose any charges on Unified Payments Interface (UPI) transactions of up to Rs 2,000 or payments through RuPay debit cards.
The government notified changes in the Payment And Settlement Act, specifying that banks cannot impose charges on payments via Unified Payments Interface transactions of up to Rs 2,000. The notification comes a month after the Parliament passed amendments to the Act paving the way to allow banks to levy charges.
The government gazette notification specified RuPay-powered debit cards and UPI transactions of up to 2,000 Indian rupees as electronic modes of payment, and said no bank or system provider shall impose any direct or indirect charge on a person making or receiving payments through these modes.
“In exercise of the powers conferred by section 10 A of the Payment and Settlement Systems Act, 2007 (51 of 2007), the Central Government hereby specifies the following electronic modes of payment, namely:– (i) Debit Card powered by RuPay; and (ii) Unified Payments Interface (UPI) transactions upto Rs. 2,000. No bank or system provider shall impose, whether directly or indirectly, any charge upon a person making or receiving a payment by using the electronic modes of payment specified in paragraph above,” the Finance Ministry said in an official notification.
The amendment to the Payment and Settlement Systems Act, 2007, gives a legal backing to the government to modify the zero-MDR framework on UPI and RuPay card transactions. The government can now decide, via notification, which electronic payment modes or transactions would remain free from MDR charges.
UPI, operated by the National Payments Corporation of India, is the world’s largest retail fast-payment system by transaction volume, according to a 2025 IMF report. It processed 24.51 billion transactions, worth 29.82 trillion rupees in August.
The network is currently live in 11 countries, including, Singapore, the UAE, France and Nepal.
In 2023, UPI and Singapore’s PayNow were linked — enabling users to send funds instantly using just a mobile number or Virtual Payment Address.
Govt Bars Banks From Charging Fees on UPI Transactions Up to Rs 2,000, RuPay Debit Cards
