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RBI/2016-17/184
DPSS.CO.PD.No.1515/02.14.003/2016-17
December
16, 2016
The Chairman and Managing
Director / Chief Executive Officers
All Scheduled Commercial Banks including RRBs / Urban Co-operative Banks /
State Co-operative Banks / District Central Co-operative Banks /
Payments Banks and Small Finance Banks /
All Card Network Providers
Dear Madam / Sir,
Special measures upto March 31,
2017: Rationalisation of Merchant Discount Rate (MDR) for transactions upto
? 2000/-
A reference is invited to circular
DPSS.CO.PD.No.2361/02.14.003/2011-12 dated June 28, 2012 on Merchant
Discount Rates (MDR) structure for debit card transactions wherein banks
were advised to cap the MDR for debit card transactions at not exceeding
0.75% of the transaction amount for value upto ? 2000/- and not exceeding
1% for transaction amount for value above ? 2000/-.
2. Following the withdrawal of
legal tender characteristics of existing ? 500/- and ? 1000/- Bank Notes
(Specified Bank Notes – SBN), in order to facilitate wider acceptance of
card payments, the following special measures for debit card transactions
(including for payments made to Government), are being introduced for a
temporary period:
i.
For
transactions upto ? 1000/-, MDR shall be capped at 0.25% of the transaction
value.
ii.
For
transactions above ? 1000/- and upto ? 2000/-, MDR shall be capped at 0.5%
of the transaction value.
3. The above measures shall not
apply to ATM transactions.
4. The above measures shall come
into effect from January 1, 2017 and shall be applicable till March 31,
2017. In the intervening period, the Reserve Bank of India will review the
framework for charges for electronic payment transactions, in consultation
with the stakeholders.
5. The directive is issued under
Section 10(2) read with Section 18 of Payment and Settlement Systems Act
2007, (Act 51 of 2007).
Yours faithfully
(Nanda S Dave)
Chief General Manager
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