Speculation about the imposition of charges on UPI transactions has been circulating in the market for several days, but Reserve Bank of India (RBI) Governor Sanjay Malhotra has clarified that there is no proposal to impose any charges on UPI transactions at this time. This significant statement comes as a major relief to millions of digital payment users. He clarified that under the current policy, UPI will remain free for users.
RBI Governor Sanjay Malhotra’s statement reaffirms the government and RBI’s stance of maintaining UPI as a zero-cost platform to promote widespread adoption of digital payments across the country. This statement comes at a time when UPI transactions are consistently hitting record highs, strengthening India’s position as the world’s largest real-time payments market.
Government and RBI policy clarified
It should be noted that earlier this year, the Finance Ministry clarified in Parliament that there are no plans to levy fees on UPI transactions. The RBI Governor’s latest statement reaffirms this government stance. This decision provides financial security and confidence to millions of users, allowing them to continue digital transactions without any additional costs.
RBI Governor’s statement enhances the credibility of digital payments
Sanjay Malhotra’s critical statement comes amid ongoing speculation about the sustainability of UPI’s zero-cost model. He had previously acknowledged that “there are costs associated with UPI transactions, and someone will have to pay them,” and also acknowledged that UPI cannot remain free forever. However, today he stressed that there are no changes being made regarding the levy of fees. Following this clarification regarding UPI transactions, shares of India’s leading payments company, Paytm, surged, closing up 2%.
What’s the reason behind keeping UPI free
UPI has long been a free platform within the overall digital payments ecosystem, and promoting digital payments is a priority for the government and the RBI. The Payment and Settlement Systems Act and its related guidelines currently prohibit charging users or merchants for UPI transactions. It’s important to note that earlier this year, the Finance Ministry clarified in Parliament that it has no plans to charge fees for UPI transactions. This unwavering stance by the RBI ensures that UPI remains easy, affordable, and convenient for millions of Indians.