Government Clarifies Misleading Reports
The Indian government, through its Press Information Bureau (PIB) Fact Check unit, has emphatically dismissed reports suggesting that banks across the country were ordered to stock up ATMs in preparation for the introduction of new UPI transaction charges. This clarification comes after a newspaper clipping, originally published by LiveMint, circulated widely online with the headline, “Banks asked to stock up ATMs ahead of UPI fees.”
Officials stated unequivocally on Wednesday that no such instructions have been issued by either the Reserve Bank of India (RBI) or the Ministry of Finance to banks. The viral clipping had falsely claimed that both institutions had sought preparations for potential cash demand amid the implementation of fees on certain UPI transactions.
Understanding UPI Transaction Fees
The government has reiterated its stance on the Unified Payments Interface (UPI) framework, clarifying that consumers will largely remain unaffected by transaction charges. Person-to-person (P2P) UPI transactions will continue to be completely free, regardless of the amount transferred. Similarly, merchant payments up to Rs 2,000 will also remain free, and transactions covered under the existing zero-Merchant Discount Rate (MDR) framework for small merchants will continue without charges.
Under the updated framework, a 0.4 percent MDR will apply exclusively to specified person-to-merchant (P2M) transactions exceeding Rs 2,000. For larger transactions of Rs 75,000 and above, the MDR will be capped at Rs 300 per transaction. It is crucial to understand that MDR is not a charge collected from customers by the government or NPCI; rather, it is distributed among the various participants in the payment ecosystem. Banks have been explicitly advised to ensure that merchants do not pass this MDR on to customers. The Finance Ministry estimates that approximately 96 percent of all merchant transactions will remain unaffected by these changes.
Importance of Verified Information
This latest official clarification underscores the critical importance of verifying financial and banking claims through official channels. PIB Fact Check has urged citizens to rely on confirmed information from government departments, the RBI, and other authorized institutions. The public is advised to refrain from forwarding unverified social media posts or headlines to prevent the spread of misinformation.