FM Sitharaman On MDR: MDR charge on UPI transactions above Rs 2000 is currently a topic of discussion and Congress is targeting the government regarding this. Now Finance Minister Sitharaman has clarified the whole picture regarding this.
The Finance Ministry introduced the Payment and Settlement Systems (Amendment) Bill, 2027, in Parliament on Tuesday. The opposition has been continuously targeting the Modi government over this bill. The bill proposes to implement a Merchant Discount Rate (MDR). This charge can be applied to UPI transactions exceeding ₹2,000. This means that if a single payment exceeds ₹2,000, the MDR charge will be levied.
Since the bill’s introduction in Parliament, there has been confusion about who this charge will apply to. The opposition has consistently criticized the government over this issue. Now, the government has clarified who this MDR charge will apply to. The Finance Minister has countered the Congress’s allegations and clarified the situation.
Finance Minister Hits Back at Congress on MDR
Finance Minister Nirmala Sitharaman on Thursday strongly responded to Congress leader Jairam Ramesh’s claim that the government is paving the way for imposing a fee on all UPI transactions. Regarding the questions raised about MDR and the opposition’s allegations, she said the Congress leader is spreading false rumors. In a social media post, the Finance Minister said, “Before spreading misinformation, @Jairam_Ramesh ji, please think carefully.”
Before spreading a canard, @Jairam_Ramesh ji, please consider this:
1. Merchant Discount Rate (MDR) applies only on the merchants and not on the end users/customers. It will support the Banks & Fintech to invest more on infrastructure, innovation & security. All users of UPI… https://t.co/sleUX4ztWe— Nirmala Sitharaman (@nsitharaman) August 6, 2026
In her post, the FM clarified the situation, stating, “If a Merchant Discount Rate (MDR) is implemented, it will apply only to merchants, not to customers. It will not impact end users or customers. This will help banks and fintech companies invest more in infrastructure, innovation, and security. All UPI users will benefit from this investment.”
Merchant Discount Rate (MDR) is the fee that merchants pay to banks, payment service providers, and other intermediaries for processing digital payment transactions.
“No final decision yet on MDR”
Nirmala Sitharaman further clarified another point in her post. She said that most importantly, the UPI and Services Steering Committee, chaired by the NPCI, has not yet taken a final decision on MDR. This will happen only after Parliament passes the Taxation and Other Laws (Amendment) Bill, 2026, which proposes to amend Section 10A of the Payment and Settlement Systems Act, 2007.
MDR only for large merchants!
A Business Today report quoting government sources stated that the proposal is not intended to impact individual users or small merchants. Rather, discussions have focused primarily on imposing MDR only on large merchants, including major e-commerce companies and businesses exceeding a prescribed annual turnover limit. Small-value transactions and person-to-person UPI payments are expected to be excluded from the proposed framework. They also stated that discussions on reintroducing MDR have been ongoing for nearly two years.
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The post Nirmala Sitharaman Notice: Finance Minister issues notice regarding MDR charge on UPI transaction of ₹2000 first appeared on informalnewz.
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