₹2,600-CR. INCENTIVE FOR BANKS TO PROMOTE DIGITAL PAYMENTS

● The Union Cabinet approved an outlay of ₹2,600 crore to promote payments using RuPay cards and the Unified Payments Interface (UPI), said Union Minister Bhupendra Yadav on Wednesday.

Banks will be provided this incentive money to promote such digital payments, an official press release said.

● The fund will be paid to banks in view of the lack of a Merchant Discount Rate (MDR) — a commission on digital transactions — for UPI and RuPay transactions.

● This regime has led to complaints from the Reserve Bank of India and banks, the Cabinet said, which have been worried about the sustainability of building digital payments infrastructure in the absence of payments needed to maintain them.

● “The scheme will also promote UPI Lite and UPI 123PAY as economical and user-friendly digital payments solutions and enable further deepening of digital payments in the country,” the Cabinet said, referring to payment systems recently introduced by the National Payments Corporation of India to reduce the load on banking networks for small transactions, and to allow payments over older feature phones, respectively.

SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB

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