MDR a small fee, will not have major impact on UPI volumes: RBI Governor Malhotra
RBI Governor Sanjay Malhotra stated that the introduction of a small merchant discount rate (MDR) on UPI transactions will not significantly impact transaction volumes. He also addressed the depreciation of the Indian Rupee, promising central bank intervention to ensure stability.
Why it matters
The stability of the Indian Rupee and the cost of digital payments are critical factors for India's economic health and consumer behavior.
Reserve Bank of India Governor Sanjay Malhotra on Wednesday (October 7, 2026) said levying a "small fee" in the form of merchant discount rate (MDR) will not have a "major impact" on UPI transaction volumes.
"As of now, we do not see any drop in volumes. And I don't personally think that a small fee will have a major impact on the volumes," he told reporters at the central bank headquarters in Mumbai.
It can be noted that last month, the government allowed charging of the MDR under which transactions above ₹2,000 will attract a fee of 0.4%.
RBI MPC meeting: Follow LIVE updates on October 7, 2026
Stating that the rupee may be “undervalued” as per many estimates, Mr. Malhotra assured that the RBI will ensure that the currency “stabilises” and will support it in reaching its “correct value”.
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