1 hr ago
UPI MDR Revision Brings 0.02% Charge to Capital Markets
Starting October 15, 2026, some payments made through UPI for investments will have a small fee called MDR.
The fee will be 0.02% of the payment, with a maximum of ₹300.
For example, a ₹1 lakh payment would produce a ₹20 MDR.
The fee can apply to certain mutual fund, securities and stockbroker payments.
Automatic SIP payments made through UPI mandates will not have this prescribed fee.
Banks have been advised not to pass the charge directly to customers.
However, brokers and investment platforms may decide how to handle the cost.
Frequent traders may notice the change more than people making occasional investments.
From October 15, 2026, eligible capital-market UPI payments will attract a 0.02% MDR capped at ₹300 per transaction.
A ₹1 lakh transaction would incur ₹20 in MDR, although investors may not be charged directly.
The charge covers eligible payments to mutual funds, securities entities, stockbrokers and broker wallets.
UPI mandates and automatic mutual fund SIP debits will continue without a prescribed MDR.
NSE CEO Ashishkumar Chauhan said UPI-based trading volumes could be affected initially but may stabilise over time.
- Who
- Investors, mutual fund platforms, stockbrokers, securities entities, banks, UPI providers and the National Stock Exchange are affected.
- What
- A 0.02% MDR will apply to eligible capital-market UPI payments, capped at ₹300 per transaction.
- Where
- The change applies to eligible UPI payments within the formal capital-market ecosystem.
- When
- The revised MDR framework takes effect on October 15, 2026.
- Why
- The Ministry of Finance said the lower rate is intended to support continued retail participation in formal financial markets.
Limited investor impact
Potential trading-volume impact
Effect on investors
Limited investor impact
The rate is relatively small, is capped at ₹300, and banks have been advised to ensure that merchants do not pass the MDR directly to customers.
Potential trading-volume impact
If brokers, mutual fund platforms or other intermediaries pass on the cost, investors could face an additional expense on UPI-linked market payments.
Effect on transaction volumes
Limited investor impact
Occasional mutual fund investors and monthly SIP investors may have little reason to change their behaviour because of the small charge.
Potential trading-volume impact
Frequent traders who make repeated UPI payments or move funds often could be more sensitive, and NSE CEO Ashishkumar Chauhan expects a possible short-term effect on UPI-based trading volumes.
Key facts
- Effective date
- October 15, 2026
- Capital-market MDR
- 0.02% per eligible transaction
- Maximum charge
- ₹300 per transaction
- Example
- A ₹1 lakh transaction would generate ₹20 in MDR
- Covered payments
- Eligible mutual fund, equity, debt-market, securities and broker-wallet payments
- Excluded payment type
- UPI mandates and automatic mutual fund SIP debits have no prescribed MDR
- Estimated reach
- The government estimates that around 4% of merchant transactions will be affected by the MDR framework
Quotes
Ashishkumar Chauhan
Managing Director and Chief Executive Officer of the National Stock Exchange
“MDR on UPI might impact trading volumes via UPI in the short term, but is likely to stabilise in the long term.”
businesstoday.in
Sources
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