Latest news with #post-MonetaryPolicyCommittee
&w=3840&q=100)
Business Standard
2 days ago
- Business
- Business Standard
Someone has to pay, but never said it would be user: RBI guv on UPI
For the sustainability of the Unified Payments Interface (UPI) it is important that the associated costs are borne by someone, RBI Governor Sanjay Malhotra said on Wednesday, while emphasising that he never said that the burden will be borne by the users. 'Who pays is important, but not so important as someone footing the bill. For sustainability, whether collectively or individually, someone pays for the costs. The government is subsidising it…I never said that users will have to pay,' Malhotra said while addressing the post-Monetary Policy Committee press conference. Previously, at a public forum, Malhotra had said that the government is subsidising various players such as banks and other stakeholders in the UPI payments system but some costs have to be paid. 'My sense is that it is not free even now, someone is paying for it, the government is subsidising it. But, somewhere the costs are being paid. The government policy has helped in expanding the use of UPI,' he added. However, the government has slashed financial year 2026 (FY26) subsidy outlay for promoting UPI P2M and RuPay debit card transactions as compared to FY25. It has allocated ₹437 crore for FY26, a 78 per cent cut from a final outlay of ₹2,000 crore allocated for FY25. This was the second time in a row when incentives to promote such digital payments were slashed after the scheme was introduced in FY23. In FY24, a subsidy amounting to ₹3,268 was approved. The government had approved the incentive scheme in April 2022 with an initial outlay of ₹2,600 crore. That said, the final allocation for such subsidies tends to be higher than the initial outlay. For example, the government only allocated ₹1,441 crore in FY25, which rose to ₹2,000 crore in the final allocation. The digital payments industry believes that the amount allocated for FY26 may not be sufficient to cover costs required for processing UPI transactions, adding that ₹10,000 crore may be required on an annual basis to maintain and expand UPI services. In March, the Payments Council of India (PCI), a representative body of digital payments players in India, wrote to Prime Minister Narendra Modi seeking introduction of a 0.30 per cent merchant discount rate (MDR) regime on transactions made through UPI at large merchants. MDR refers to a fee that merchants pay banks or companies processing payments for executing a transaction.
&w=3840&q=100)
Business Standard
2 days ago
- Business
- Business Standard
Not saying users will have to pay for UPI but someone has to bear: RBI Guv
The RBI governor said that the government policies have helped boost the use of UPI among consumers. Malhotra added that UPI transactions have been increasing in the past few months New Delhi The Reserve Bank of India (RBI) Governor Sanjay Malhotra on Wednesday said that government policies are focused on expanding the adoption of the unified payments interface (UPI), during his address at the post-Monetary Policy Committee (MPC) press conference. Responding to a question on whether UPI will remain free, Malhotra said, "I never said that UPI cannot remain free forever. It is not free even now; someone is paying for it." Who pays the cost? Building on this, Malhotra said that somewhere the cost is being paid, but the question is, who pays the cost? "Who pays is important, but not so important as someone footing the bill. For sustainability, whether collectively or individually, someone pays for the costs. The government is subsidising it," said Malhotra. The governor said that the fee for making UPI payments might not necessarily pass down to the user. "I never said that users will have to pay," said Malhotra. Govt aims to expand UPI usage The RBI governor said that the government policies have helped boost the use of UPI among consumers. Malhotra added that UPI transactions have been increasing in the past few months. According to the latest data from the National Payments Corporation of India (NPCI), UPI transactions touched a record high of 19.47 billion in July. In terms of value, it was ₹25.08 trillion, the second-highest after ₹25.14 trillion recorded in May. Banks are charging payment aggregators According to a recent report on ET BFSI, major banks, including ICICI Bank, Axis Bank and Yes Bank, are passing on the UPI charges to payment aggregators (PAs). Payment aggregators are third-party service providers, such as RazorPay, Cashfree, and PayU, that allow businesses to accept online payments. The report added that PAs are excluded from the zero merchant-discount rate (MDR) policy that applies to Person-to-Merchant payments. Clarifying the stance Last month, during a Financial Express BFSI Summit in Mumbai, Malhotra had said that the cost of running UPI will have to be borne by either the government or users. This led to wide speculations that users might soon need to make payments for using UPI. However, Malhotra's latest remarks should help allay these concerns. 'UPI is accessible, cheap, secure, and sustainable…and it will be sustainable only if someone bears the costs," Malhotra had said at the summit. The important thing is that the costs of any service should be paid, whether collectively or by the user, Malhotra had said.
