UPI stays free for consumers; MDR may apply only to big merchants: Sitharaman

The Rajya Sabha on Monday passed the Bankers' Books Evidence Bill and returned the Taxation and Other Laws (Amendment) Bill, even as Opposition members staged a walkout during the debate. Finance Minister Nirmala Sitharaman assured the House that Unified Payments Interface (UPI) transactions will remain free for consumers.

Countering allegations that the taxation bill would burden small traders and consumers by imposing charges on UPI transactions, Sitharaman said the proposed legislation is an enabling provision and does not impose any tax or transaction fee on users. "Consumers will not have to pay any charges on UPI transactions," she stated, adding that the vast majority of merchant payments, including low-value transactions to roadside vendors, would continue to be free.

She explained that once the bill is passed, the National Payments Corporation of India (NPCI) will finalise the Merchant Discount Rate (MDR). Any such rate would apply only to a limited category of merchant transactions above a prescribed threshold, she said.

The debate unfolded after CPI(M) member John Brittas moved a statutory motion to disapprove an ordinance brought by the Finance Ministry in June. Brittas argued that the ordinance was unnecessary as the Monsoon Session was scheduled for July. He also accused the government of being subservient to the United States, claiming the UPI charge proposals were based on American diktats. "The Prime Minister promised that UPI will be free for everyone," he reminded the House.

AAP member Sanjay Singh said the bill would create problems for the public, as digital transactions have become an integral part of trade and commerce.

After the Opposition members walked out, Sitharaman criticised the communists, saying they "could not face facts" and resorted to filibustering. The walkout, she said, was an attempt to avoid the debate.

The Bankers' Books Evidence Bill, 2026, which was also passed by the Lok Sabha last week, updates the legal framework to align with contemporary digital banking practices. Sitharaman noted that the banking sector had evolved significantly with the emergence of non-banking finance companies, payment aggregators, and fintech companies. These entities play an important role in fulfilling the banking and financial needs of the common people, she said, adding that it was necessary to provide them a similar evidential framework.

Earlier, the Rajya Sabha proceedings were interrupted twice in the morning session, with Opposition members demanding a statement from Home Minister Amit Shah on unspecified issues. The disruptions have been a recurring feature of the Monsoon Session, with the government and Opposition trading blame over the lack of legislative business.

The Taxation and Other Laws (Amendment) Bill, which amends Section 10A of the Payment and Settlement Systems Act, 2007, is aimed at providing statutory protection to specified electronic payment modes. The Finance Minister reiterated that UPI has remained free for consumers since its launch and will continue to be so.