Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Politics / Policy/  RBI set to issue final guidelines on MDR charges
BackBack

RBI set to issue final guidelines on MDR charges

Pending the final guidelines, the existing norms for MDR charges will continue beyond 31 March, RBI governor Urjit Patel said

The Reserve Bank issued a draft circular on ‘Rationalisation of Merchant Discount Rate (MDR) for Debit Card Transactions’ on 16 February. Photo: HTPremium
The Reserve Bank issued a draft circular on ‘Rationalisation of Merchant Discount Rate (MDR) for Debit Card Transactions’ on 16 February. Photo: HT

Mumbai: Aimed at encouraging digital transactions, the Reserve Bank on Thursday said it will soon come out with final guidelines on MDR charges on debit card payments.

Pending the final guidelines the existing norms for MDR (merchant discount rate) charges will continue beyond 31 March, RBI governor Urjit Patel said while announcing first bi-monthly monetary policy for 2017-18.

As per the existing guidelines, the MDR for debit card payments, including for payments made to the government, is capped at 0.25% for transactions up to ,000 and 0.5% between 1,000-2,000.

The existing MDR cap is 0.75% for transactions up to 2,000 and 1% for over 2,000. However, there is no RBI cap on MDR on credit card payments.

The Reserve Bank issued a draft circular on ‘Rationalisation of Merchant Discount Rate (MDR) for Debit Card Transactions’ on 16 February.

“The extensive feedback received, including from the government, banks, card networks, the Indian Banks’ Association, the Payments Council of India, private entities and individuals are being examined. Until the issuance of final guidelines, the extant instructions on MDR for debit card transactions will continue to apply," he said.

However, the policy did not spelled the exact timeline by when the final guidelines on rationalisation of MDR charges would be announced.

Also Read: RBI governor Urjit Patel criticises farm loan waiver schemes

According to the draft guidelines issued in February, the MDR charge has been proposed at 0.40% of the transaction value for small merchants with annual turnover of Rs20 lakh and special category merchants, like utilities, insurance, mutual funds, educational institutions and government hospitals.

MDR charge, which is levied on debit card transaction, would be even less at 0.3% if transaction is through digital PoS (QR Code), it had said.

The draft also proposes that banks will ensure that all merchants display the signage “No convenience or service charge is payable by customers".

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Politics News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 06 Apr 2017, 05:55 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App