Government Prohibits Banks From Charging on UPI Payments Below ₹2,000

The government has issued a formal notification restricting banks and payment system providers from levying charges on UPI and RuPay payments capped at ₹2,000, marking a significant move to reduce transaction costs for consumers and merchants.

The directive covers both direct and indirect charges that financial institutions might have previously imposed on these digital payment methods. This measure aims to encourage wider adoption of cashless payment systems across India while reducing friction in small-value transactions that form a substantial portion of daily commerce.

UPI, or Unified Payments Interface, has emerged as one of India's most widely used digital payment platforms, facilitating real-time fund transfers between bank accounts. RuPay, the domestic card payment network, similarly sees extensive usage for various transaction types. By eliminating charges on eligible transactions below ₹2,000, the government seeks to enhance the cost-effectiveness of these payment channels.

The notification applies to all eligible UPI and RuPay transactions, with both payment originators and recipients protected from surcharges. This regulatory intervention underscores the government's commitment to making digital financial services more accessible and affordable across the Indian economy.