Banks will save substantially on their expenditure shared with the RBI on currency printing, transportation, storing, replacing, and handling due to the incremental rise in assorted digital transactions. Sources said the Finance Ministry reckons that with digital payments picking up momentum as a result of MDR waiver, banks will only stand to gain on a net basis. The waiver, effective January 1, is aimed at incentivising digital payments and is in sync with the policy objective of moving towards a less-cash economy. The government has turned down a request from commercial banks for compensation to the tune of Rs 2,000 crore a year for the loss of revenue arising out of the waiver of merchant discount rate (MDR) on digital payments through RuPay cards and Unified Payment Interface (UPI). Effective January 1, the government waived MDR on payments made through prescribed electronic modes.
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