Published 19:21 IST, August 26th 2020
UPI transactions more than 20 times may cost you around ₹5; details inside
UPI transaction is not free anymore if you exceed the limits imposed by private banks for paying more than 20 times in a month. Here is all you need to know.
- Tech
- 3 min read
BHIM UPI payments have become the key to which many people are making payments every day. From money transfers to paying bills, users can send and receive money quickly and quite easily. However, private banks are now going to charge you money if you exceed a limit of 20 transactions.
Private banks are going to charge you around Rs 2.5 to Rs 5 after every transaction
Private banks will now be charging you around Rs 2.5 to Rs 5 for P2P after every, as per the siting on the official sites of the respective banks. However, the official websites of the banks reveal that "there are no charges for 'Received money' transactions on UPI". This means if your total transaction for the month is 70. But, you only made 20 payments and the rest 50 is the received amount, you will not be charged extra.
The official site of ICICI Bank, Axis Bank and Kotak Bank will charge a user Rs 2.50 for transactions up to Rs 1000 and Rs 5 for transactions beyond Rs 1000, once they have exceeded 20 UPI transactions. HDFC Bank's official portal reveals that the bank is going to charge Rs 2.75 for transactions up to Rs 1000 and Rs 4.75 for transactions beyond Rs 1000 after the limit of 20 UPI transactions is complete.
Should private banks charge you for your UPI transactions?
According to WorldProNews, the RBI spends around Rs 5,000 crore annually to print cash but as the world is shifting towards digital payments, there are certain savings incurred by the organisation.
A report published by Ashish Das, a Professor of Statistics at Indian Institute of Technology Bombay, sites the guidelines imposed by Government through Section 10A which says, “10A. Notwithstanding anything contained in this Act, no bank or system provider shall impose any charge upon anyone, either directly or indirectly, for using the electronic modes of payment prescribed under section 269SU of the Income-tax Act, 1961”.
Das also revealed that BHIM UPI transactions have increased from 2019 to 2020 and this is the reason why banks are eyeing this limit on the transactions.
As we all are aware that 2020 has been quite economically challenging for the country. Whereas people shifting to online payments has not only reduced the earnings that the private banks received once a person used to do card transactions but it has also made it quite hard to substantiate money. However, Prof Das also brings to the notice of what should be done to avoid harassing private banks and users at the same time.
He reveals that the government's directives regarding the UPI transaction by mentioning that “RBI and Banks will absorb these costs from the savings that will accrue to them on account of handling less cash as people move to these digital modes of payment”. This explains that the government has reportedly stated that RBI and banks should use the cost from the savings that come as the people shift to cashless transactions which reduce the need to invest more on printing cash.
Updated 19:21 IST, August 26th 2020