Lok Sabha passes Bill to authorise Govt. to permit banks to levy charges on UPI transactions
The Lok Sabha has passed a bill amending the Payment and Settlement Systems Act, allowing the government to authorize banks to levy charges on UPI transactions. The move aims to create a sustainable revenue model for digital payment infrastructure.
Why it matters
This is a major policy shift for India's digital economy, potentially ending the long-standing zero-charge policy for UPI payments.
Lok Sabha on Thursday (August 6, 2026) passed a Bill to amend the Payment and Settlement Systems Act, 2007 that authorises the government to permit banks and other service providers to levy charges on payments through unified payments interface (UPI) and other notified electronic payment modes.
The Taxation and other Laws (Amendment) Bill w through which the government also amended the Payment and Settlement Systems Act, 2007, was passed without a debate due to persistent sloganeering by the Opposition over various issues, including alleged theft of donation at the Ram temple in Ayodhya.
The amendment seeks to remove the existing legal provision that prevents banks and payment service providers from charging Merchant Discount Rate (MDR) on notified electronic payment modes.
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