RBI to rationalise charges on debit card transactions

The Reserve Bank of India has decided to rationalise charges on debit card transactions based on category of merchants with a view to giving “further fillip” to digital payments. The RBI said that in recent times debit card transactions at ‘Point of Sales’ have shown significant growth.

An RBI draft report had made a case for restructuring MDR on the basis of merchant turnover rather than the present slab-rate based on transaction value. A differentiated MDR for asset-light acceptance infrastructure and a cap on absolute amount of MDR per transaction will also be prescribed.

The RBI also decided to permit overseas branches and subsidiaries of Indian banks to refinance External Commercial Borrowings (ECB) of AAA rated corporates as well as Navratna and Maharatna PSUs, by raising fresh ECBs. This is being done to “provide a level playing field” to overseas branches and subsidiaries of Indian banks. Currently Indian corporates are permitted to refinance their existing ECBs at a lower all-in-cost.

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