EconomyMonday, 28 September 2026·The Hindu - Economy
RBI Deputy Governor says 0.4% MDR on UPI above ₹2,000 will not trigger cash surge
RBI Deputy Governor Shirish Chandra Murmu said the new MDR on select UPI merchant payments is unlikely to increase cash usage.
Key highlights
Direct fact
On September 18, 2026, RBI Deputy Governor Shirish Chandra Murmu said the 0.4% Merchant Discount Rate (MDR) on person-to-merchant UPI payments above ₹2,000 from October 15, 2026, is unlikely to cause a rise in cash transactions.
Key specifics
- The MDR rate is 0.4% for person-to-merchant UPI payments above ₹2,000 from October 15, 2026.
- The MDR will be paid by merchants, not consumers, and is capped at ₹300 for transactions of ₹75,000 or more.
- Payments between individuals and most everyday merchant payments will remain free.
- Murmu said RBI issued more than 600 draft and final amendment circulars in the last year.
- RBI has reclassified its regulated entities into 11 categories to reduce compliance burden.
Exam lens
Question type: banking regulation and digital payments, 0.4% MDR, ₹2,000 threshold, ₹300 cap, 11 categories of regulated entities; TNPSC may ask who bears the MDR and from which date it applies.