New Delhi, December 22: Finance Ministry has asked Public Sector Banks to restrict fees on payments through Immediate Payment Service- IMPS and Unified Payments Interface -UPI to the extent that is applicable for NEFT fund transfer of over 1,000 rupees.
IMPS is an interbank electronic instant mobile money transfer service through mobile phones. The UPI app enables customers to make online as well as offline payment to merchants from their bank account.
In a statement, the Finance Ministry has said, for Unstructured Supplementary Service Data (USSD) transactions above 1,000 rupees, a further discount of 50 paisa on these rates will apply. USSD is mobile short code message and used mainly for banking services on feature phone.
The Ministry has issued a direction in public interest to all Public Sector Banks to further promote digital and card payments. It said, the direction will apply for all transactions up to 31st of March, 2017.
In line with the central government’s objective of promotion of payments through cards and digital means over payments in cash, the Reserve Bank has recently rationalized customer charges for transactions up to 1,000 rupees settled on IMPS, UPI and USSD from 1st of January to 31st of March, 2017. RBI has also rationalized the Merchant Discount Rate (MDR) for debit card transactions up to 2,000 rupees for the three month period.