No proposal to charge UPI transactions: RBI governor
What's the story
Reserve Bank of India (RBI) Governor Sanjay Malhotra has clarified that there is no proposal to levy charges on Unified Payments Interface (UPI) transactions. The clarification was given during the post-Monetary Policy Committee (MPC) press conference on Wednesday. This comes amid earlier concerns regarding the sustainability of UPI's zero-cost framework and who bears the costs associated with these transactions.
Cost concerns
Concerns over sustainability of UPI's zero-cost model
Malhotra had previously raised concerns over the sustainability of UPI's zero-cost model. At a Financial Express BFSI Summit in Mumbai in July, he said, "This (UPI) is an important infrastructure. The government has taken a view it should be available free and the government is subsidizing it." He also noted that this approach has led to the rapid growth of digital payments.
Growth statistics
UPI processed 20 billion transactions in August
According to RBI data, UPI processed 20 billion transactions in August 2023, a staggering 34% increase year-on-year (YoY). This rapid growth underscores the importance of maintaining an accessible, affordable, secure, and sustainable payment system. Malhotra had stressed that "it will be sustainable only if someone bears the costs," whether it's the government or another entity footing the bill for these services.