Supreme Court refuses interim stay on 0.4% UPI MDR above ₹2,000

The Supreme Court on Monday, 28 September 2026, refused an interim stay on a merchant discount rate for specified UPI payments. A bench of Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana issued notice to the Centre, the Reserve Bank of India and the National Payments Corporation of India. It asked for affidavits within about four weeks on the legal and technical basis of the charge, and on who earns from it. The fee framework is still scheduled to start on 15 October. The court has not given a final ruling.

India Today, CNBC-TV18, Moneycontrol, The Hindu, The Tribune and the New Indian Express reported the refusal of an interim stay. Hindustan Times reported the request for a short affidavit from the Centre and the Chief Justice's remarks. That earlier text did not itself record a stay order. The later accounts, including the 29 September note drawn from The Hindu, The Tribune and the New Indian Express, state that the court declined interim relief while the challenge goes on.

The charge, as the reports describe it, is 0.4 per cent on specified person-to-merchant UPI payments above ₹2,000. The merchant pays it, not the customer. Payments of ₹75,000 and above are capped at ₹300. Hindustan Times described that cap as applying above ₹75,000. Payments of ₹2,000 or less stay outside the fee. Person-to-person transfers stay free at any amount. Essential and thin-margin sectors pay a flat ₹5. India Today and CNBC-TV18 named railways, telecom, insurance, fuel and agricultural inputs for that flat charge. CNBC-TV18 reported 0.02 per cent, also capped at ₹300, for mutual funds, securities, stockbrokers and dealers. Hindustan Times linked the framework to a finance ministry notification of 14 September. India Today and CNBC-TV18 said the plea also challenges a framework announced on 15 September.

The Chief Justice said, Hindustan Times reported: "This is less of a legal and more of a technical issue. We need you (Centre) to state the facts on a short affidavit." The bench asked what executive power supports the charge, and said that if it is a fee it cannot rest on an executive order alone. Justice Bagchi asked what the character of the charge is if it is neither a tax nor a fee. The court declined interim relief while the case proceeds on the merits.

Additional Solicitor General N. Venkataraman told the court the decision takes effect on 15 October. He said 96 per cent of persons using UPI are exempt, and that essential services among the remaining share are capped. The Centre also told the court that about 96 per cent of transactions stay exempt. He said not one rupee goes to the government. He called the charge a settlement fee between the bank and the service provider, which NPCI facilitates, and said it is neither a tax nor a fee. Those are submissions. They are not a judgment.

The public-interest petition is by advocate Anjan Datta. CNBC-TV18 spells the name Dutta. Hindustan Times reported that he argued with advocate Ashutosh Dubey. The plea challenges the 14 September notification and the 15 September framework. It alleges that the amended law gives the executive unguided power, and that statutory safeguards, transparency and consultation were inadequate. It asks the court to quash or suspend the framework above ₹2,000, or to send it back for consultation and an impact study. CNBC-TV18 reported a challenge to amended Section 10A of the Payment and Settlement Systems Act, 2007, and a complaint that RuPay debit cards stay free with no ceiling. Those are the petition's allegations. None of the reports says the court has decided whether the charge is legal.

What's next

The framework is still due on 15 October. The court has not stayed that date. The Centre, the RBI and NPCI have been asked for affidavits within about four weeks. The reports name no next hearing date. The merits remain pending.