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RBI Says Small UPI Fee Unlikely to Dent Transaction Volumes
RBI Governor Sanjay Malhotra said a small fee on some UPI payments is not expected to make many people stop using UPI.
The fee is 0.4% for transactions above Rs 2,000.
He also spoke about the rupee, which has been under pressure.
He said the RBI wants the rupee to move in an orderly way and avoid sharp swings.
He said some measures suggest the rupee may be undervalued.
Banks have raised nearly USD 133 billion through a special deposit scheme for people living abroad.
The RBI expects banks to use that money carefully.
Malhotra also said the pressure on the current account is temporary and expects the Balance of Payments to return to surplus.
RBI Governor Sanjay Malhotra said a small merchant discount rate is unlikely to significantly affect UPI transaction volumes; the RBI sees no drop so far.
The government allowed an MDR of 0.4% on transactions above Rs 2,000.
Malhotra said the RBI would support an orderly rupee movement, limit excessive volatility and help the currency find its correct value.
He said the rupee may be undervalued by some measures and cited its approach toward an intraday low of 96.96 against the US dollar.
Malhotra said banks raised nearly USD 133 billion through the FCNR(B) deposit facility, and the RBI expects them to deploy the funds prudently.
- Who
- RBI Governor Sanjay Malhotra.
- What
- He discussed UPI transaction fees, the rupee, bank lending and financial flows.
- Where
- At the Reserve Bank of India headquarters in Mumbai.
- When
- Wednesday; the report dates the remarks to October 7.
- Why
- He was responding to reporters' questions about the proposed UPI fee and pressure on the rupee, among other economic issues.
Key facts
- MDR rate
- 0.4% on transactions above Rs 2,000, under the government decision described in the reports.
- UPI volumes
- Malhotra said the RBI had not seen a drop and he did not expect a small fee to have a major impact.
- Rupee level
- The rupee was approaching its intraday all-time low of 96.96 against the US dollar.
- FCNR(B) deposits
- Banks raised nearly USD 133 billion through the concessional swap facility.
- Bank credit
- Malhotra said credit growth would remain strong and support broader economic activity.
- Balance of Payments
- Malhotra expressed confidence it would soon return to surplus.
Quotes
Sanjay Malhotra
Governor of the Reserve Bank of India
“We will ensure that the rupee stabilises, that the rupee finds its correct value, and we will support an orderly movement of the rupee in finding its correct value and at the same time in ensuring that there is no excessive volatility.”
telegraphindia.com
“As of now, we do not see any drop in volumes. And I don’t personally think that a small fee will have a major impact on the volumes.”
theprint.in
telegraphindia.com
Sources
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