A Key Update on UPI Merchant Payments
There has been a lot of discussion about charges on Unified Payments Interface (UPI) transactions, but it's important to understand the specifics. Starting from October 15, 2026, a Merchant Discount Rate (MDR) will be introduced for certain business transactions.
This charge applies only to person-to-merchant (P2M) payments above ₹2,000. Crucially, all person-to-person (P2P) UPI transactions remain completely free, regardless of the amount. The new MDR is a fee that merchants will pay, not the customer. For specified merchant transactions over ₹2,000, a charge of 0.4% will apply, though this is capped at ₹300 for very large transactions of ₹75,000 or more. Officials estimate that around 96% of all merchant transactions will not be affected by this change, as they are either below the ₹2,000 threshold or fall under exemptions for small traders. So, for the average user sending money to friends or paying small shopkeepers, nothing changes.
New ATM Withdrawal Limits for SBI Salary Accounts
If you are a State Bank of India (SBI) Salary Package Account holder, you should be aware of a change in your ATM transaction limits starting October 1, 2026. The number of free transactions you can make at other banks' ATMs is being reduced from ten to five per month. This limit includes both financial transactions like cash withdrawals and non-financial ones such as balance enquiries or mini-statements. Once you cross this free limit, a charge of ₹23 plus GST will be levied for each additional cash withdrawal, and ₹11 plus GST for non-financial transactions. It is important to note that this change specifically applies to SBI's Salary Package Account holders; other types of accounts, like the Basic Savings Bank Deposit (BSBD) accounts, have different rules which remain unchanged, offering four free cash withdrawals a month.
More Transparency in Bulk Fixed Deposits
The Reserve Bank of India (RBI) is introducing new rules from October 1 to bring more transparency to interest rates on bulk fixed deposits. A bulk deposit is generally defined as a single term deposit of ₹3 crore or more. Under the new framework, banks will be required to disclose their interest rates for these large deposits on their websites every business day by 10 AM. This move ensures that rates are disclosed in advance and applied uniformly for similar deposits accepted on the same day, regardless of which branch the transaction occurs at. While this change primarily affects high-net-worth individuals and corporate depositors, it signals a broader regulatory push towards greater transparency in the banking sector. For the vast majority of retail customers with FDs below this amount, existing interest rate structures will continue as before.
Revised Charges for National Pension System (NPS)
Subscribers to the National Pension System (NPS) will see a revised fee structure from October 1, 2026. The Pension Fund Regulatory and Development Authority (PFRDA) has updated the charges that Points of Presence (PoPs), which are the intermediaries that facilitate NPS accounts, can collect. The new structure includes a one-time onboarding fee of ₹200 for each new Permanent Retirement Account Number (PRAN) opened through a PoP. Additionally, there will be an annual charge of 0.20% of the assets under management (AUM), which will be payable quarterly. However, this annual fee will not apply to accounts that are classified as dormant. These changes are aimed at standardizing the costs associated with managing an NPS account.
A Heads-Up on International Card Payments
A new regulation from the RBI, also effective October 1, aims to improve the reporting of international transactions. The rule change is intended to better track the import and export of services, including those paid for by individuals using credit cards for personal use, such as software purchases or subscriptions. However, there is currently a lack of clarity on how individuals are expected to report these transactions to their banks. While the onus is on the importer (the person making the purchase), the mechanism for this reporting has not been clearly defined by banks or regulators. This has created a grey area, and customers who frequently make international payments for services should watch for further clarifications from their banks on how to remain compliant.
