Banks asked to refund charges collected for UPI, digital payments

New Delhi: In a move to encourage digital payments in the country, the Central Board of Direct Taxes (CBDT) said that banks cannot levy any extra charge on transactions made through electronic modes on or after January 1, 2020.

The electronics modes of transactions include 1) Debit card powered by RuPay, 2) Unified Payment Interface (UPI), 3) Unified Payment Interface Quick Response code (UPI QR code), BHIM UPI QR code.

"According to Section 10 A under the Payments and Settlement Systems Act 2007, no bank or system provider shall impose any charge on a payer making payment or beneficiary receiving payment, through electronic modes prescribed under section 269SU of IT Act," the CBDT said.

The regulator noticed that certain banks collect charges for UPI transactions. A certain number of transactions are free and beyond the limit, bank charges for every UPI payment.

The banks were also advised to refund charges collected from customers for digital transaction on or after January 1, 2020. Asianet Online