Archive · 7 Aug 2026
FM Sitharaman rejects UPI charge claims, accuses Ramesh of canard
India has a popular way to pay for things using a phone, called UPI.
Right now, paying with UPI is free for people.
The government is changing a law, and a leader named Jairam Ramesh said this might make people pay money for using UPI.
Nirmala Sitharaman, the Finance Minister, said that is not true.
She explained that a fee called Merchant Discount Rate would only be charged to shops and businesses, not to regular people.
She said the extra money would help banks make digital payments safer and better.
She also said a committee will decide about this fee only after the new law is passed by Parliament.
Ms. Sitharaman said Congress should have discussed the issue in Parliament instead of complaining outside.
Jairam Ramesh still believes the change could lead to UPI charges later.
He said the Reserve Bank of India already has enough money, so no new fees are needed.
Finance Minister Nirmala Sitharaman hit back at Congress leader Jairam Ramesh over his criticism of the Taxation and Other Laws (Amendment) Bill, 2026, saying he should refrain from 'spreading a canard' about UPI transactions.
Sitharaman clarified that Merchant Discount Rate (MDR) applies only to merchants and not to end users or customers.
The minister said the move would enable banks and fintech companies to invest more in infrastructure, innovation and security, with all UPI users ultimately benefiting.
Ramesh alleged the amendment removes the statutory guarantee that has kept UPI transactions free of charges, opening the door for future MDR on digital payments that could be passed on to ordinary users.
The Bill, which proposes amending Section 10(A) of the Payment and Settlement Systems Act, 2007, would be followed by an NPCI-headed committee decision on MDR only after Parliament passes it.
- Who
- Finance Minister Nirmala Sitharaman and Congress leader Jairam Ramesh
- What
- A dispute over the Taxation and Other Laws (Amendment) Bill, 2026 and whether it could lead to charges on UPI transactions
- When
- Thursday; the exact date is not stated, and Parliament's Monsoon session began on July 20
- Where
- New Delhi, India
- Why
- The government says MDR applies only to merchants and would fund investment in digital payment infrastructure, while Congress alleges the amendment removes the guarantee that kept UPI free and that any levy would be passed on to ordinary users
Government (Nirmala Sitharaman)
Congress (Jairam Ramesh)
Charges on UPI users
Government (Nirmala Sitharaman)
MDR applies only to merchants and never to end users or customers, so UPI remains free for users; the move helps banks and fintech companies invest in infrastructure, innovation and security that all UPI users benefit from.
Congress (Jairam Ramesh)
The amendment removes the statutory guarantee that has kept UPI transactions free, opening the door for future imposition of MDR on digital payments; any such levy would ultimately be passed on to ordinary users.
Why MDR is needed
Government (Nirmala Sitharaman)
Charging MDR is necessary to keep UPI financially sustainable and to enable investment in digital payment infrastructure and security.
Congress (Jairam Ramesh)
The Reserve Bank of India has adequate financial resources, including a surplus transfer of Rs 2.86 lakh crore to the Centre in 2025-26, to support digital payments infrastructure without imposing any additional burden on merchants or consumers.
- Finance Minister
- Nirmala Sitharaman
- Critic
- Jairam Ramesh (Congress)
- Legislation in dispute
- Taxation and Other Laws (Amendment) Bill, 2026
- Government claim
- MDR applies only to merchants, not end users
- Congress allegation
- Amendment removes statutory guarantee keeping UPI free of charges
- MDR decision body
- UPI and Services Steering Committee headed by NPCI
- Legal provision to be amended
- Section 10(A) of the Payment and Settlement Systems Act, 2007
- RBI surplus cited by Ramesh
- Rs 2.86 lakh crore to the Centre in 2025-26
