New UPI Charges for High-Value Payments
Starting from October 15, certain high-value UPI transactions will attract a Merchant Discount Rate (MDR). A 0.4% MDR will apply to person-to-merchant payments above ₹2,000. Crucially, this charge is to be paid by the merchant, not the customer, and merchants
are prohibited from passing this cost on to you. For consumers, day-to-day UPI use remains largely free. Person-to-person transfers of any amount and merchant payments up to ₹2,000 are not affected by this new rule. The MDR is capped at ₹300 for very large transactions of ₹75,000 or more. This change is aimed at creating a sustainable revenue model for payment service providers while protecting small vendors and consumers from additional costs.
Public Provident Fund (PPF) Rate Unchanged
For those invested in the popular long-term savings instrument, the Public Provident Fund, there will be no change in returns this quarter. The government has decided to keep the interest rate for PPF unchanged at 7.1% for the October to December 2026 quarter. This decision also extends to most other small savings schemes, including the National Savings Certificate (NSC) and Sukanya Samriddhi Yojana, whose rates also remain unchanged. The government reviews the interest rates on these schemes every three months. While some investors may have hoped for an increase, the stability provides predictability for long-term financial planning. Interest on PPF is credited to the account annually.
RBI Rule Changes for Bank Deposits
The Reserve Bank of India has introduced new rules from October 1 to increase transparency in how banks handle bulk deposits. Bulk deposits are typically large fixed deposits, generally starting at ₹3 crore for most commercial banks. Under the new framework, banks are now required to publish their interest rates for these large deposits on their websites every business day by 10 AM. Furthermore, banks must offer a uniform interest rate for similar deposits accepted on the same day, across all their branches and for all customers. While this change primarily affects high-net-worth individuals and corporate depositors, it reflects a broader push by the RBI for greater transparency and consistency in the banking sector.
SBI Revises ATM Withdrawal Rules
State Bank of India (SBI) has updated its service charges for Basic Savings Bank Deposit (BSBD) account holders, effective October 1. Customers with these accounts will continue to receive four free cash withdrawals per month. This limit includes withdrawals from both SBI and other bank ATMs. After the four free transactions are used, the bank will levy a charge of ₹15 plus GST for each additional cash withdrawal. It's important to note that all digital transactions for these accounts remain completely free and have no limit, encouraging a shift towards cashless payments.
Final Push for PAN-Aadhaar Linking
While not an October-specific rule, a critical deadline is approaching that affects all banking and financial activities. The final date to link your PAN with Aadhaar is December 31, 2025, for certain taxpayers. Failing to do so will render the PAN inoperative from January 1, 2026. An inoperative PAN can block you from filing income tax returns, opening bank accounts, investing in mutual funds, and can lead to higher TDS deductions. If you haven't completed the process, it's crucial to do so well before the deadline to avoid disruption to your financial life. A penalty of ₹1,000 is applicable for linking after the due date has passed for most taxpayers.
