UPI Funding Model: RBI Governor Malhotra Seeks Sustainability
Why in the news
The Governor said the fast-growing UPI network needs durable funding for its running costs.
Key facts
| Point | Detail |
|---|---|
| Volume now | 60 crore a day |
| Two years ago | 31 crore a day |
| MDR | Zero since Jan 1, 2020 |
| Funding | Government subsidy |
The debate
- Malhotra: someone has to bear the costs, though the subsidy aided adoption.
- Banks and fintechs want a modest MDR, mainly on high-value or large-merchant payments.
- Government: UPI is a digital public good; it prefers incentives to charges.
- Surveys: most users would cut usage if fees came.
Exam angle
- Term: Merchant Discount Rate (MDR).