FM Sitharaman Says Not Right Time For Charging On Digital Payment

Central govt. announced that it will not levy any charges on UPI

Taking notes from the Finance Ministry on online payments, Union Finance Minister Nirmala Sitharaman said on Friday that the central government believes that this is not the right time to make digital payments chargeable.

While addressing an event, Finance Minister Sitharaman said, "We see digital payment as the public good. People should be able to access it freely so that the digitisation of the Indian economy becomes attractive. Also, through digitisation, we achieve a level of transparency which is so required."

Moreover, the FM added, "Therefore, we still think it is not the right time to make it chargeable. We are more and more pushing toward open digital transactions, digitisation and platforms which can enable great access. The RBI's recommendation is to a working paper and lets the working paper where it is."

Her statement came against the backdrop of the Reserve Bank of India (RBI) seeking feedback from the public on the various changes proposed in the payments system, including the possibility of imposing tiered charges on transactions done through the Unified Payments Interface (UPI).

Despite that, the central govt. last week announced that it will not levy any charges on UPI (Unified Payments Interface) services.

As announced in the Statement on Developmental and Regulatory Policies dated December 08, 2021, the Reserve Bank of India (RBI) has released a discussion paper on "Charges in Payment Systems" for public feedback, RBI said in a statement. The discussion paper was released on August 17.

The focus of RBI's initiatives in the payment systems has been to ease frictions which may arise from systemic, procedural or revenue-related issues.

While many intermediaries exist in the payments transaction chain, consumer complaints are generally about high and non-transparent charges.