All Agency Banks
Dear Sir / Madam
Reimbursement of Merchant
Discount Rate (MDR) Charges for Government transactions up to Rs.1 lakh
through debit cards
Please refer to Circular
No. DGBA.GAD.No.2128/44.02.001/2016-17 dated February 16, 2017, read with
the OM No. S-11012(1(12)/MDR/2017/RBD/824-894 dated May 11, 2017 issued by
O/o the CGA and our clarificatory mail dated May 23, 2017 regarding the
reimbursement of Merchant Discount Rate.
2. It is again clarified that
the full amount paid to the Government by the customers / through debit /
credit cards should be remitted to the concerned Government Ministry /
Department. The reimbursement of MDR charges on debit card use (up to
Rs.one lakh) can be claimed from RBI separately as per extant guidelines.
Deduction of MDR charges from the receipts of government is not permissible
3. Please note that MDR charges
on debit card transactions above Rs.one lakh and on any credit card
transaction are not being absorbed by Government of India and hence will
not be reimbursed by RBI. Accordingly, agency banks should not deduct MDR
charges from the receipts of the government in these cases also.
4. It may please be noted that
as directed by the O/o the CGA vide its OM
No.S-11012/1(12)/MDR/2017/RBD/824-894 dated May 11, 2017, agency banks
which have remitted the net amount of Government receipts after deduction
of MDR charges to the Ministries/Departments in contravention of the
guidelines referred to above are required to remit the MDR charges so
deducted immediately to the concerned Ministry/Department under intimation
to Reserve bank of India.