Compromised PM again surrendering to US pressure: Rahul Gandhi slams govt's UPI move

Congress leader Rahul Gandhi on Tuesday alleged that the Modi government has quietly created a path to impose fees on UPI transactions, after a notification said banks and payment system providers cannot charge for UPI payments of up to Rs 2,000 or RuPay debit card payments.

The Congress said the move raises questions about whether charges could be allowed on higher-value UPI transactions. The party claimed the change could eventually make users pay for digital payments and asked if the government was opening the sector to American firms to "appease" US President Donald Trump.

The Centre has so far not said whether charges would apply to merchant UPI transactions above Rs 2,000. Until now, UPI transactions have not carried any charge, regardless of value.

In a post in Hindi on X, Rahul Gandhi said the government had quietly paved the way for imposing fees on UPI. "Now, MDR can be levied on merchant UPI transactions above Rs 2,000. Even if these transactions account for just 5 per cent of the volume, they make up nearly 65 per cent of UPI's total transaction value," he said.

He added, "The government says no fees will be charged to customers. But where will the fees imposed on shopkeepers ultimately come from? Added to the prices, straight out of the customer's pocket."

He also said American payment companies had long opposed India's zero-MDR policy and alleged that the government had now opened the path to change it in that direction. "Just like with the US Trade Deal, Compromised PM Modi is once again surrendering to American pressure," he said.

Congress general secretary in-charge communications Jairam Ramesh said, "Just as we warned on August 6, 2026, to which the Hon'ble FM herself had deemed it fit to respond, the Modi government is now using new laws bulldozed through Parliament to start the process of charging for UPI."

Referring to the amended Payment and Settlement Systems Act, 2007, he said the new notification barred banks and providers from charging only for UPI transactions under Rs 2,000, while offering "NO explicit protection for any transaction above this cap".

Ramesh said, "The stage is clearly being set for all of us to pay a fee for UPI transactions. Tomorrow the cap itself might be changed with another such notification - there is no longer a guarantee in the law. For all we know, the government can introduce a charge for daily person-to-person transactions as well."

He also alleged, "The Modi government has yet again shown complete lack of honesty and transparency and has broken the trust of users. Is all of this being done to open digital payments for American companies to appease President Trump?"

According to a gazette notification dated September 14, no bank or system provider can impose, directly or indirectly, any charge on a person making or receiving a payment through a RuPay debit card or a UPI transaction of up to Rs 2,000.

The notification follows an amendment to Section 10A of the Payment and Settlement Systems Act, 2007, which creates an enabling framework for imposing a Merchant Discount Rate, or MDR, on payments through UPI and other notified electronic payment modes.

The amendment Bill was passed in Parliament during the Monsoon Session, which ended on August 13. After the Bill was passed, the government said the UPI and Services Steering Committee, headed by the National Payments Corporation of India, would decide the MDR rates.

Explaining why charges were being considered, the government said the sharp rise in transaction volumes required continuous upgrades in cybersecurity, fraud prevention and infrastructure.

The government had also said charges were needed for market expansion and self-sustainability, and that increasing competition required more companies to expand through a self-sustaining revenue model.

It said dependence on subsidies alone was not viable for the next wave of growth and that a balanced framework was needed to keep UPI robust, inclusive and future-ready. UPI is operated by the National Payments Corporation of India, an initiative of the Reserve Bank of India and the Indian Banks' Association.

Last month, before the legislation was passed, the Congress had attacked the government over the Taxation and Other Laws (Amendment) Bill, asking whether Prime Minister Narendra Modi was trying to dilute UPI and open the digital payments sector to American businesses "under pressure" from his "good friend Donald Trump".

Ramesh had said the bill removed the statutory guarantee that kept UPI transactions free, opened the door to MDR charges that could later be expanded to all payments, and that the cost would inevitably be borne by ordinary people.

Finance Minister Nirmala Sitharaman had said MDR on digital transactions applies to merchants and not customers, and that the charge would help banks and fintech companies invest more in infrastructure and security.

Responding to Ramesh, she said the NPCI-headed UPI and Services Steering Committee was yet to take a call on MDR, which would happen only after Parliament passed the Taxation and Other Laws (Amendment) Bill, 2026.

"Before spreading a canard, @Jairam_Ramesh ji, please consider this: Merchant Discount Rate (MDR) applies only on the merchants and not on the end users/customers. It will support the Banks & Fintech to invest more on infrastructure, innovation & security. All users of UPI will reap the benefits of this investment," she had said.- EndsPublished By: India Today Web Desk Published On: Sep 15, 2026 15:04 IST