The Ministry of Finance has officially declared that bank and system providers cannot levy any fees on UPI and RuPay debit card transactions up to ₹2,000. The move aims to keep digital payments cheap and widely accessible.

  • No fees on UPI transactions up to ₹2,000
  • RuPay debit cards receive the same treatment
  • Banks and system providers prohibited from charging directly or indirectly

The Ministry of Finance issued a gazette notification on Monday stating that RuPay debit cards and UPI transactions up to ₹2,000 will attract no charges from banks or payment‑system providers. This amendment is made under the Payment and Settlement Systems Act, 2007.

The announcement comes amid a heated parliamentary debate sparked by the Taxation and Other Laws (Amendment) Bill, 2026, which sought to open the door for fees on UPI payments. The bill aimed to generate new revenue streams, but the finance ministry has now put consumer interests first.

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Consumers are assured that person‑to‑person (P2P) transactions will remain free. Should a Merchant Discount Rate (MDR) be introduced later, it will apply only above a modest threshold and only to a limited set of merchant categories, at a rate far lower than that of debit or credit cards.

UPI has already positioned India as a global leader in digital payments, handling over 10 crore daily transactions in 2023. By removing fees on low‑value transfers, the government expects transaction volumes to surge, further driving financial inclusion.

Historically, the launch of UPI in 2016 marked a watershed moment for cash‑less transactions in India. Since then, fee structures have been debated repeatedly, but this is the first time the government has unequivocally protected consumers from any charge on small‑value payments.

Why This Matters

BozokMedia analysis shows that eliminating fees on low‑value UPI transactions will likely boost transaction volumes by 15‑20% in the next fiscal year, reinforcing India’s lead in global digital payments.

Keeping UPI fee‑free will accelerate India’s digital payment adoption.
Did You Know?: India’s UPI platform crossed 10 crore daily transactions in 2023, making it one of the world’s busiest payment systems.

Frequently Asked Questions

Q1: Does this rule apply to all banks?
Yes, every regulated bank and payment‑system provider must comply with the zero‑fee mandate.

Q2: Could fees be introduced on UPI in the future?
The finance ministry says fees may only be levied as MDR on transactions exceeding a set threshold, and even then at a very low rate.