RBI mulls introducing charges on UPI-based funds transfer

The Reserve Bank of India is examining the possibility of recovering the cost of its large investment and operational expenditure in payments systems, regulating interchange and mandating per transaction fee for debit card transactions, and introducing charges on Unified Payments Interface (UPI)-based fund transfer transactions.

The central bank has sought public comments on the aforementioned topics and others in its “Discussion Paper on Charges in Payment Systems”.

The paper noted that as operator, RBI can be justified to recover the cost of its large investment and operational expenditure in RTGS, as it involves expenditure of public money. Further, the charges imposed by RBI in Real Time Gross Settlement (RTGS) are not intended as a means of earning.

“RTGS is a system used mainly for large value transactions and is predominantly used by banks and large institutions / merchants to facilitate real-time settlement. Does such a system, with institutions as members, require RBI to provide free transactions,” the paper said.

As operator of National Electronic Funds Transfer (NEFT), the central bank has made investments for implementing the infrastructure and operating it. Therefore, though RBI may not be guided by profit motive in operating NEFT, recovery of reasonable cost could be justified, the paper noted.