Ex-SBI Chief Rajnish Kumar Defends MDR Fee on Large UPI Payments
· Business · India Today, Zee News
Former State Bank of India Chairman Rajnish Kumar has defended the government's decision to introduce a Merchant Discount Rate on select UPI transactions above Rs 2,000, calling it a necessary fee rather than a tax. Speaking to India Today TV, Kumar explained that maintaining digital payment infrastructure, ensuring compliance, and combating cybersecurity threats involve substantial costs that cannot be indefinitely subsidized. Under the new framework taking effect on October 15, 2026, merchants will pay up to 0.4 per cent on eligible transactions, capped at Rs 300 for amounts of Rs 75,000 or more. Kumar stressed that consumers will continue to make UPI payments without incurring any transaction fees, while market competition among banks will likely keep actual rates below the regulatory ceiling.
Why it matters
The introduction of merchant fees on large UPI transactions establishes a funding mechanism for payment infrastructure and cybersecurity while keeping everyday consumer payments free.
Read the original report — India Today
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