← 15 September 2026's Current Affairs · Economy GS-3 Prelims ★★★★★ Mains ★★★★★
Government bars bank charges on small-value UPI payments
Why in News?
UPI payments up to Rs 2,000 stay free: the NPCI-RBI structure GS3 tests
The government has barred banks from charging UPI transactions up to Rs 2,000, keeping small digital payments free.
Why it matters: asked in UPSC 2017; GS-3 core; factual, Prelims-type
What you need to know
2 min read
The government has directed that no charges be levied on UPI transactions up to Rs 2,000, aiming to keep small digital payments free for users.
The Unified Payments Interface (UPI) is operated by the National Payments Corporation of India (NPCI), a not-for-profit umbrella organisation set up under the guidance of the Reserve Bank of India and the Indian Banks' Association.
UPI has become the dominant mode of digital retail payments in India in recent years.
Sources: Deccan Herald · Topper IAS editorial
Key facts
Remember these
- Government has barred banks from charging on UPI transactions up to Rs 2,000
- UPI (Unified Payments Interface) is operated by the NPCI
- NPCI stands for National Payments Corporation of India, a not-for-profit umbrella organisation
- NPCI was set up under the guidance of the RBI and the Indian Banks' Association
- UPI is now the dominant mode of digital retail payments in India
Prelims · Mains
How the exam will ask it
Prelims
- The National Payments Corporation of India (NPCI) operates the Unified Payments Interface (UPI).
- NPCI was set up under the guidance of the Reserve Bank of India and the Indian Banks' Association.
- The government has directed that no charges be levied on UPI transactions up to Rs 2,000.
Mains
GS Paper 3 - Indian Economy: transaction charges on small digital payments could discourage financial inclusion and cash-to-digital migration, so the government's zero-charge mandate on UPI transactions up to Rs 2,000 keeps small-value digital payments free for users. This raises the recurring question of how banks and payment service providers recover costs without an MDR, pointing to the need for a sustainable incentive mechanism to keep UPI's zero-MDR regime viable.
PYQ connection
A question UPSC has already asked on this
Consider the following statements:
- National Payments Corporation of India (NPCI) helps in promoting the financial inclusion in the country.
- NPCI has launched RuPay, a card payment scheme.
Which of the statements given above is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Show answer
Answer: C
Why this matters: today's issue is directly connected to a concept UPSC has already tested. Read the story with this question in mind.
Practise this PYQ →Quick recall
Answer before you reveal
The recent decision to waive charges on UPI payments up to Rs 2,000 concerns a payment system operated by which organisation?
- Reserve Bank of India
- Securities and Exchange Board of India
- National Payments Corporation of India
- Insurance Regulatory and Development Authority of India
Show answer
Answer: C — The Unified Payments Interface (UPI) is operated by the National Payments Corporation of India (NPCI), a not-for-profit entity set up under the guidance of the RBI and the Indian Banks' Association.
Convert this topic into marks
Today's 10-MCQ test · instant analysis · Powered by AdaptIQ