SBI chairman CS Setty vows to ensure MDR costs aren't passed on to UPI customers

SBI chairman CS Setty has vowed to ensure that the Monetary Policy Committee's (MPC) decision to introduce a 0.85% MDR (Merchant Discount Rate) on UPI transactions is not passed on to customers. The move, which is set to come into effect on October 15, aims to curb fraud and improve the security of UPI transactions.

Setty, who is also the chairman of the Indian Banks' Association (IBA), said that banks and NPCI will work together to ensure that MDR is not passed on to retail customers or small merchants. This collaborative approach is vital in maintaining transparency and fairness in the UPI ecosystem.

The introduction of MDR is expected to have a minimal impact on UPI volumes. With an estimated 96% of transactions exempt from the MDR charge.

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Setty also stated that SBI's UPI business is expected to grow significantly in the coming years. Driven by the increasing adoption of digital payments and the expansion of its Kisan Credit Card and Mudra loan initiatives. The bank's commitment to providing credit lines through these channels is a shows its dedication to supporting the growth of MSMEs (Micro.

Small, and Medium Enterprises) in the country.

Furthermore, the introduction of MDR is seen as an opportunity for SBI to enhance its point-of-sale credit platform, with credit made available when customers transact through UPI. The bank's efforts to ensure that MDR costs are not passed on to customers demonstrate its commitment to providing affordable and accessible financial services to its customers.

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As the UPI ecosystem continues to evolve, it is essential to address the concerns around MDR and ensure that its implementation does not negatively impact the growth of digital payments in the country. With the support of banks and NPCI.

The introduction of MDR is expected to be a positive development for the UPI ecosystem. Driving growth and innovation in the digital payments space.

Setty's commitment to ensuring that MDR costs are not passed on to customers is a significant step towards maintaining the trust and confidence of consumers in the UPI ecosystem. As the UPI business continues to grow, it is essential to prioritize transparency, fairness, and customer-centricity to drive long-term growth and success.