NSE CEO Ashish Chauhan on New UPI MDR Charges
Ashish Chauhan clarifies that the new UPI MDR for capital market transactions is a matter between brokers and clients, not a government issue.
National Stock Exchange (NSE) Managing Director and CEO Ashish Chauhan has clarified the stance regarding the recently introduced Merchant Discount Rate (MDR) for UPI payments in the capital markets. Addressing journalists following the NSE's listing on the BSE, Chauhan stated that there have been no discussions with the government concerning this new fee structure.
According to the NSE chief, the matter is primarily an internal concern for the industry. He suggested that the responsibility for navigating these changes lies with the market participants themselves. "It seems to be an issue between the broker and client. They will find a way out of whatever the differences will be," Chauhan remarked, indicating that brokers and investors will likely reach a resolution regarding the cost implications.
The NPCI Framework Explained
The shift in payment dynamics follows a new framework introduced by the National Payments Corporation of India (NPCI). This framework specifically targets capital-market transactions, which include payments related to mutual funds, securities, and stockbrokers. Under these new rules, such transactions will attract an MDR of 0.02 per cent, with the charge being capped at a maximum of Rs 300 per transaction.
Key details of the upcoming payment structure include:
- Effective Date: The new charges are scheduled to come into force on October 15.
- Transaction Limits: While capital market transactions face the 0.02 per cent rate, the broader UPI framework applies a 0.4 per cent MDR on specific person-to-merchant (P2M) transactions exceeding Rs 2,000.
- Zero-MDR Exceptions: UPI payments to merchants for amounts up to Rs 2,000, along with transactions covered under the zero-MDR framework for small merchants, will continue to be free of charge.
The Finance Ministry has previously noted that approximately 96 per cent of P2M transactions are expected to remain unaffected by these changes, and importantly, customers will not be charged the MDR directly.
NSE’s Recent Market Debut
Chauhan's comments come on the heels of a significant milestone for the National Stock Exchange. On September 24, the exchange made its highly anticipated debut on the BSE. The IPO, which was a massive Rs 22,561.57 crore offer for sale by existing shareholders, saw positive momentum from the start.
The shares, which were priced in the Rs 1,700-Rs 1,785 range, listed at Rs 1,800 per share. By the end of the first trading session, the stock had climbed to close at Rs 1,818, marking a successful entry into the public market for India's leading exchange.