Updated: December 29, 2019 12:25:19 am
In order to promote digital transactions, Finance Minister Nirmala Sitharaman on Saturday said no Merchant Discount Rate (MDR) charges will be applicable on transactions through home-grown RuPay and UPI platforms beginning January 1, 2020. The government launched a common e-auction platform to sell attached assets of defaulters for improved realisation of value. The Department of Revenue (DoR) will soon notify RuPay and UPI as the prescribed modes of payment for digital transactions without any MDR, the FM said after meeting with heads of state-owned and private sector banks. Top officials from the Finance Ministry, Reserve Bank of India, the National Payments Corporation of India (NPCI) and the Indian Banks’ Association attended the meeting.
All companies with a turnover of Rs 50 crore or more will be mandated by the government to provide the facility of payment through RuPay Debit card and UPI QR code to their customers. MDR is the cost paid by a merchant to a bank for accepting payment from their customers via digital means, which is usually recovered from the customer. The merchant discount rate is expressed in percentage of the transaction amount.
“After extensive consultation with stakeholders, banks and so on. I’m happy to say that announcement which was made in the Budget will see the notification coming on January 1, 2020 whereby those modes which are getting notified will not have charges under the MDR being levied on them,” she said. Indigenously developed digital payment medium like RuPay and BHIM UPI will now have edge over the payment gateway promoted by foreign companies. In her Budget speech in July, Sitharaman proposed that businesses should offer low cost digital modes of payment such as BHIM UPI, UPI QR Code, Aadhaar Pay, Debit Cards, NEFT, and RTGS to their customers, and no charge or MDR shall be imposed on customers to promote digital payment.
Banks will also start a campaign to popularise RuPay Debit card and UPI. The Finance Minister said the government has already amended two laws — Income Tax Act and the Payments and Settlement Systems Act, 2007 — to give effect to these provisions. Sitharaman also launched a common e-auction platform to sell attached assets of defaulters for improved realisation of value. The platform is equipped with property search features and navigational links to all PSB e-auction sites, provides single-window access to information on properties up for e-auction as well as facility for comparison of similar properties, and also contains photographs and videos of uploaded properties.
A total of 35,000 properties have been uploaded on the platform by PSBs. PSBs have attached assets worth over Rs 2.3 lakh crore over the last three financial years. To strengthen banks, in addition to the recent infusion of Rs 60,314 crore, additional infusion of Rs 8,855 crore (Rs 4,360 crore to Indian Overseas Bank, Rs 2,153 crore to Allahabad Bank, Rs 2,142 crore to UCO Bank and Rs 200 crore to Andhra Bank) has been approved, the Ministry said.
The government said recent reforms have restored banks to health, with the gross NPAs of PSBs declining from Rs 8.96 lakh crore in March 2018 to Rs 7.27 lakh crore in September 2019, their provision coverage ratio rising to their highest level in seven years, and banks returning to profitability, with as many as 13 banks reporting profits in first half of current fiscal year.
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