UPI transactions to be charged? Here’s what RBI Governor Sanjay Malhotra says

Reserve Bank of India (RBI) Governor Sanjay Malhotra confirmed on Wednesday that there is no current proposal to levy any charge on transactions made via the Unified Payments Interface (UPI).

The RBI governor’s remarks came during a post-monetary policy press conference when he directly addressed the question of potential charges on UPI, a system whose transaction volumes have soared recently.

“Is there going to be charges on UPI? Well, there is no proposal before us,” he stated, quashing speculation on the matter.

Digital locking of credit-purchased mobiles under scrutiny

In a separate development, Governor Malhotra also disclosed that the central bank is currently examining a proposal that would permit lenders to remotely disable or ‘lock’ mobile phones bought on credit in the event of a default on EMI (Equated Monthly Instalment) payments.

Adding further detail, RBI Deputy Governor M Rajeshwar Rao explained that the proposal is being scrutinised for its potential benefits and drawbacks.

“The issue of digital locking is under examination, as the governor has pointed out,” Rao said.

“There are pros and cons on both sides in terms of balancing customer rights and requirements, data privacy, and creditors’ requirements. So, we are examining the issue and will… take a view at a later point in time.”

Financial stability foremost priority, says Malhotra

After announcing a slew of measures centred around ease of doing business and relaxations of norms, Governor Malhotra asserted that financial stability is the foremost priority for the central bank.

Malhotra said the RBI is, however, cognizant of ensuring that regulations should not entail a cost which impedes economic growth.

“I do not think that you should see these measures as any kind of relaxation or kind of letting go of sight…from financial stability. Stability is foremost for us,” Malhotra said.

“At the same time, we have to be very careful. We have to ensure that we are not in any way impeding growth,” he added.

“We need to continue looking at rationalising our regulations so that the productive needs of the economy are met with the least compliance burden with the least of cost while at the same time ensuring that wherever prudential measures are required, they are not compromised,” the RBI governor said.