India bars bank charges on UPI, RuPay payments up to Rs 2,000

The Indian government has formally notified that banks and system providers cannot impose any charges on Unified Payments Interface (UPI) transactions up to ₹2,000 or on payments made via RuPay-powered debit cards. The notification, issued on Monday, September 14, 2026, specifies these as protected electronic modes of payment under the Payment and Settlement Systems Act, 2007. The government gazette notification states that no bank or system provider shall impose, whether directly or indirectly, any charge upon a person making or receiving a payment through these specified modes. This move clarifies the rules around charges following a recent amendment to the Act that had created uncertainty. The notification follows the passage of the Taxation and Other Laws Amendment Bill, 2026 by Parliament last month. That amendment removed a blanket exemption from charges on electronic payments under the Income-tax Act, which had previously prevented any Merchant Discount Rate (MDR) on UPI and RuPay transactions. The change paved the way for potential fees on larger transactions.