RBI Governor Sanjay Malhotra recently dismissed rumours of charging fees on UPI (Unified Payments Interface) transactions and clarified that currently there will be no fees on UPI transactions.
RBI New Policy: Reserve Bank of India (RBI) Governor Sanjay Malhotra recently clarified that there will be no fees on UPI (Unified Payments Interface) transactions. This announcement comes as a relief to digital payment users, as UPI has become the most popular and fastest-growing payment medium in the country. Governor Malhotra stated that no proposal to impose fees on UPI transactions is before the central bank and that the government and RBI are committed to keeping digital payments free and accessible for the time being.
Malhotra stated that there will be no fees on UPI, but he also acknowledged that UPI operations incur costs that must be borne by someone. He also stated that UPI services may not always be free, but no such change is currently proposed. The UPI system is easily accessible due to the subsidy program introduced by the government and RBI. However, the reduction in subsidies in the budget had led to speculation about the possibility of fees on virtual payment services, which the RBI has dismissed.
Additionally, the RBI is considering allowing banks to digitally “lock” mobile phones purchased on a loan if a customer fails to pay EMIs. This proposal aims to ensure the security of financial institutions, but it requires balancing privacy and consumer rights. RBI Deputy Governor M. Rajeshwar Rao has stated that a decision will be made after weighing the pros and cons of both sides.
Essentially, the RBI believes that the UPI system should continue to be free to promote digital payments in the country and enable seamless use by individuals from all walks of life. This is part of efforts to ensure the Indian digital payments model is not only compliant with regulatory incentives but also to ensure it is stable and secure through technological improvements.
Meanwhile, in its monetary policy review, the RBI projected a gross domestic product (GDP) growth rate of 6.8% for 2025-26, with a significant decline in inflation. This signals a positive sign of the Indian economy’s strength and rapid growth.
This announcement has brought significant relief to both companies and users working in the digital transactions sector. For example, Paytm’s shares saw a surge following Malhotra’s statement. Furthermore, it was clarified that there will be no user charges for UPI at present, and this free and accessible model of digital payments will continue.
Thus, RBI’s policy not only encourages the digital payments revolution but also helps reduce payment costs for consumers and promote financial inclusion. With further improvements expected in digital payment systems in the future, RBI will continue to prioritize consumer safety and convenience.
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