Finance Minister Nirmala Sitharaman announced that the Merchant Discount Rate (MDR) charges for businesses with over ₹50 crore annual revenues will be waived off from January 1, 2020.
The modes of payment will be notified soon, Ms. Sitharaman said after a review meeting with heads of public sector banks (PSBs).
In her Budget speech in July, she had proposed to waive MDR charges to spur digital payments.
“I, therefore, propose that the business establishments with annual turnover more than Rs 50 crore shall offer such low-cost digital modes of payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well as merchants,” she had said in her Budget speech.
“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.”
Ms. Sitharaman on Saturday instructed public sector banks to clear pending vigilance cases against their officials for alleged malpractices.