Reserve Bank of India (RBI) Governor Sanjay Malhotra recently clarified that there will be no fee on UPI (Unified Payments Interface) transactions. This announcement comes as a relief for digital payment users, as UPI has become the most popular and fastest-growing payment medium in the country today.
Governor Malhotra said that there is no proposal before the central bank to impose fees on UPI transactions and that the government and RBI are in favor of 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 has operating costs that someone must bear. He also stated that UPI services don’t always have to be free, but no such change is currently proposed. The UPI system is easily accessible due to subsidy programs introduced by the government and the RBI, but 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 access for all segments of society. This is part of efforts to ensure that the Indian digital payments model is not only compliant with regulatory incentives but also stabilizes and secures it through technological improvements.
Meanwhile, the RBI, in its monetary policy review, projected GDP growth to increase to 6.8% for 2025-26, while inflation also declined significantly. This signals a positive sign of the Indian economy’s strength and rapid growth.
This announcement brought significant relief to both companies and users working in the digital transactions sector. For example, Paytm’s stock saw a surge following Malhotra’s statement. Furthermore, it was clarified that UPI will not currently incur any user charges and that 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.
