Banks, NPCI to ensure MDR not passed on: SBI
SBI Chairman CS Setty has pledged that the bank and NPCI will prevent Merchant Discount Rate (MDR) costs from being passed on to retail customers and small merchants. The bank aims to leverage UPI for credit expansion while scaling its Yono app to become a top-tier UPI platform.
Why it matters
This commitment ensures that the introduction of MDR fees will not disrupt digital payment adoption for small-scale users, maintaining the momentum of India's UPI-led financial inclusion.
SBI chairman CS Setty sees UPI as an opportunity to provide credit lines through Kisan Credit Card, mudra loan, overdraft against mutual funds. He sees UPI with the potential to become a point-of-sale credit platform, with credit made available when customers transact through UPI and vows to work with NPCI and other lenders to ensure that MDR is not passed on to consumers. Excerpts:How do you see the impact of MDR?An estimated 96% of transactions will not attract MDR, as person-to-person transactions and person-to-merchant transactions of up to Rs 2,000 are exempt and there are several other carve-outs.
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