In line with the Central Government’s objective of promotion of payments through cards and digital means over payments in cash, the Reserve Bank of India (RBI) has recently rationalized customer charges for transactions up to Rs. 1000/- settled on Immediate Payment Service (IMPS), Unified Payments Interface (UPI) and Unstructured Supplementary Service Data (USSD) with effect from 01.01.2017 till 31.03.2017. RBI has also rationalized the Merchant Discount Rate (MDR) for debit card transactions up to Rs. 2000/- with effect from 01.01.2017 till 31.03.2017.
In order to further promote digital and card payments, the Department of Financial Services (DFS), Ministry of Finance has issued a direction in public interest to all Public Sector Banks(PSBs), in accordance with which these banks shall not charge fees for transactions settled on Immediate Payment Service (IMPS) and Unified Payments Interface (UPI) in excess of rates charged for National Electronic Funds Transfer (NEFT) for transactions above Rs. 1000/-, with service tax being charged at actuals.
The Banks shall not charge on UPI and IMPS not more than charges applicable in case of NEFT charges for transaction more than One thousand .For Transaction less than 1000 ,RBI has already given exemption from charges.
As per RBI norms, NEFT transfers of up to Rs 10,000 attract a fee of Rs 2.50, from Rs 10,000 to Rs 1 lakh the fee is Rs 5; from Rs 1 lakh to Rs 2 lakh it is Rs 15 and above Rs 2 lakh it is Rs 25. Service tax is charged in addition to this.
So the same charges as applicable for NEFT shown above shall also be charged for IMPS and UPI
For Unstructured Supplementary Service Data (USSD) transactions above Rs. 1000/-, a further discount of fifty paise on these rates shall apply.USSD is mobile short code message and is used mainly for banking services on feature phones. USSD fee is Rs 1.50 per transaction , No fees will be charged up to Rs 1000/- and above it now charges has been reduced by Rs 0.50 and net charges applicable is One Rs for transaction above Rs 1000/-
This direction shall apply for all transactions up to 31.03.2017.