Archive · 16 Sep 2026
UPI MDR Revision Sets 0.02% Charge on Capital-Market Payments
Starting October 15, 2026, some UPI payments used for investing will have a small payment charge.
The charge is called MDR and will be 0.02% of the payment, up to ₹300.
For example, a ₹1 lakh payment would create a ₹20 charge.
It can apply to certain mutual-fund, stock-market, securities and broker-wallet payments.
Automatic SIP payments made through UPI AutoPay will not have this prescribed charge.
Banks have been advised not to pass the charge directly to customers.
However, brokers and investment platforms may decide whether to absorb the cost.
Frequent traders may notice the change more than people who invest occasionally.
The National Stock Exchange expects UPI trading activity could dip at first and then stabilise.
From October 15, 2026, eligible capital-market UPI payments will attract 0.02% MDR, capped at ₹300 per transaction.
A ₹1 lakh payment would generate ₹20 in MDR, while a transaction at or above the cap would incur no more than ₹300.
The charge covers eligible mutual-fund, equity, debt-market, securities and broker-wallet payments.
UPI mandates and automatic mutual-fund SIP debits will continue without a prescribed MDR.
Investors may see little direct impact, but brokers could face higher costs and frequent UPI-based trading may initially decline.
- Who
- Investors, brokers, mutual-fund platforms, 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, with a maximum of ₹300 per transaction.
- When
- The revised framework takes effect on October 15, 2026.
- Where
- The change applies to eligible UPI payments within the formal capital-market ecosystem.
- Why
- The Ministry of Finance says the lower rate is intended to support continued retail participation in formal financial markets.
Limited direct investor impact
Possible intermediary and volume impact
Who bears the cost
Limited direct investor impact
The Ministry of Finance has advised banks to ensure merchants do not pass MDR directly to customers, and UPI application providers are prohibited from imposing additional platform or hidden charges.
Possible intermediary and volume impact
If brokers, mutual-fund platforms or other intermediaries absorb the MDR, their costs could rise; if they pass it on despite the guidance, investors could face a small additional expense.
Effect on trading activity
Limited direct investor impact
The rate is low, capped at ₹300, and SIPs and occasional investments may be largely unaffected, so most retail investors may not change their behaviour.
Possible intermediary and volume impact
Discount brokers and active or intraday traders could be more affected because repeated UPI pay-ins and fund transfers may create meaningful cumulative costs; Ashishkumar Chauhan expects a possible short-term effect on UPI trading volumes.
IPO and one-time payments
Limited direct investor impact
Industry representatives said IPO-related payments and one-time transfers should have limited practical impact because the concessional rate is much lower than the standard 0.4% P2M rate.
Possible intermediary and volume impact
The impact still depends on how brokers and other intermediaries account for the new payment-related cost.
- Effective date
- October 15, 2026
- Capital-market MDR
- 0.02% per eligible transaction
- Maximum charge
- ₹300 per transaction
- ₹1 lakh example
- The MDR would be ₹20
- Covered payments
- Eligible mutual-fund, equity, debt-market, securities and broker-wallet payments
- Excluded payments
- 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
