Reserve Bank of India (RBI) Governor Sanjay Malhotra has once again clarified that there is “no proposal” to impose charges on Unified Payments Interface (UPI) transactions at present. Speaking at the post-Monetary Policy Committee (MPC) press conference on Wednesday, the Governor addressed the ongoing speculation about the sustainability of UPI’s zero-cost model.
As per The Economic Times, Malhotra maintained that while the UPI is free to use for consumers because of government subsidies, the cost of running the system cannot be wished away forever. " I never said that UPI can stay free forever. What I said was there are costs (associated with UPI transactions), and they need to be paid for by someone, "he clarified. He also added, " Who pays is important but not so important than someone footing the bill. So, it is important for us for the sustainability of the model, that whether collectively or individually someone pays.”
UPI has emerged as the base of India's digital payments ecosystem. Figures from RBI indicate that UPI handled close to 20 billion transactions in August 2025, a 34% year-on-year increase. Malhotra, while addressing earlier at the Financial Express BFSI Summit in July, pointing towards the rapid expansion of digital payments, emphasized that " This (UPI) is an important infrastructure. The government has taken a view it should be available free and the government is subsidizing it. And I would say it has borne good fruits.”
Government’s stance on zero-cost model
The government's position is made clear: to maintain UPI free so as to spur greater use of digital payments. As per reports, the Payment and Settlement Systems Act and accompanying guidelines also ban charging fees from users or merchants for making UPI transactions.
Relief to markets, Paytm stock gains
The Governor's assurance was a relief to markets too. Based on several reports, One97 Communications, which is Paytm's parent, witnessed its stock go up by more than 2% to ₹1,147 on the NSE soon after his statement.
Sustainability debate continues
By maintaining UPI zero-cost, the government as well as RBI continues to strengthen India's position as the world's largest real-time payments market but also continues to trigger debates on how the long-term sustainability of the platform will be handled.