RBI to reimburse banks MDR charges effective January 1

First such claim may be made by April 30, 2017 for the quarter ending March 31, 2017

The Reserve Bank will start reimbursing MDR charges to banks for payments made since January 1 through debit cards by citizens, in line with the government's move to further digital solutions.

In December 2016, the government had decided to absorb the merchant discount rate (MDR) charges in respect of debit card transactions for making payments to it. The move was aimed to encourage people to use digital payments post demonetisation.

"In order to operationalise the (government's direction), the Reserve Bank will reimburse banks MDR on debit cards used for payment of tax and non-tax dues to the government of India with effect