In a bid to promote cashless transactions in the country, the Reserve bank of India (RBI) has given banks the freedom to fix bank service charges for transactions, Minister of State for Finance Santosh Kumar Gangwar said on Friday.
RBI has removed interest rates on credit card dues. Rates of interest are determined by banks with the approval of their respective Board of Directors subject to regulatory guidelines on interest rate on advances issued by RBI from time to time. However, RBI does not maintain information on the rate of commission charged.
Meanwhile, National Bank for Agriculture and Rural Development (NABARD) has approved a scheme for giving 0.5 per cent incentive on payments made through the Aadhar Enabled Payment System (AEPS) to merchants.
With regards to transactions made on PoS devices through debit cards between January 1 and March 31, 2017, Merchant Discount Rate (MDR) has been fixed at 0.25 per cent for transaction value up to Rs 1,000 for debit card transactions value between Rs. 1,000 and Rs. 2,000, MDR has been capped at 0.5 percent.
RBI has decided that till March 3, 2017, banks and prepaid payment instrument issuers shall not levy any charges on customers for transactions up to Rs. 1,000 settled on Immediate Payment Service (IMPS), Unstructured Supplementary Service Data (USSD) and Unified Payments Interface (UPI).
