EconomySunday, 4 October 2026·The Hindu - Economy
RBI says 0.4% MDR on UPI above ₹2,000 from Oct 15 may not raise cash use
RBI Deputy Governor Shirish Chandra Murmu said the new 0.4% MDR on person-to-merchant UPI payments above ₹2,000 from October 15 will not necessarily push cash usage higher.
Key highlights
Direct fact
In September 2026, RBI Deputy Governor Shirish Chandra Murmu said that the 0.4% Merchant Discount Rate (MDR) on person-to-merchant UPI payments above ₹2,000, effective from October 15, 2026, is unlikely to trigger higher cash usage.
Key specifics
- 0.4% MDR applies from October 15, 2026 to person-to-merchant UPI payments above ₹2,000.
- The MDR will be paid by merchants, not consumers, and is capped at ₹300 for transactions of ₹75,000 or more.
- Person-to-person UPI transfers and most everyday merchant payments will remain free.
- Murmu said the RBI issued more than 600 draft and final amendment circulars in the last 1 year.
- The RBI has reclassified regulated entities into about 11 categories as part of compliance-burden reduction.
Exam lens
Question type: RBI policy and digital payments. Key facts: 0.4% MDR, October 15, 2026, ₹2,000 threshold, ₹300 cap, 11 categories. TNPSC may ask which payment type is charged and who bears the cost.