MDR waiver: RBI may pay Rs 1,800 cr to banks to fund free transactions

Finance Minister Nirmala Sitharaman last month said no Merchant Discount Rate (MDR) charges will be applicable on transactions through homegrown RuPay and UPI platforms

With the government waiving MDR charges on Rupay and BHIM-UPI payments, the RBI may have to shell out about Rs 1,800 crore to banks towards free transaction during 2020, a report has said.
 

During 2018 and 2019, the Ministry of Electronics and Information Technology (MeitY) provided required MDR support to banks on debit cards and BHIM-UPI transactions having ticket size within Rs 2000, a report by IIT Bombay professor Ashish Das said.
 

"Going forward, in case RBI provides the necessary support for debit cards and BHIM-UPI (which does not include mastercard/VISA debit cards), it may be prudent to let NPCI