RBI Governor Malhotra Says UPI Model Needs Sustainable Funding

Mumbai: Putting an end to the noise that users will have to pay for UPI transactions, the Reserve Bank of India (RBI) governor Sanjay Malhotra

on Wednesday clarified that “someone” would have to pay in the longer run for a sustainable funding model for the NPCI-led instant real-time payment system, Unified Payments Interface (UPI). However, this did not necessarily mean ‘users’ would pay, he said.

Speaking at the Monetary Policy press conference, Malhotra told reporters, “I never claimed that UPI would always be free. What I

stated was that there are real costs involved in processing UPI transactions, and someone needs to bear them."

“Who pays is a matter of detail, what matters more is that someone is footing the bill. For the long-term viability of the system, whether the cost is borne collectively or individually, it has to be paid," he added.

He also said that UPI is not free even now, as the government subsidizes it. He said that the government’s policy has helped expand

UPI usage, with daily transactions rising from 31 crore to 61 crore in the last two months.

The RBI in its monetary policy also announced plans to standardise the procedure for settlement of claims with regard to deposit accounts, and articles kept in safe deposit lockers of deceased bank customers.

A draft circular will be issued shortly for public consultation, the central bank said.

"… the extant instructions require banks to adopt a simplified procedure to facilitate expeditious and hassle-free settlement of

claims made by survivors/nominees/legal heirs, the procedures vary across banks. To enhance customer service standards, it has been

decided to streamline the procedures and standardise the documentation to be submitted to banks,” RBI said.

According to reports, the total value of unclaimed bank deposits lying in forgotten or overlooked accounts in India is estimated to be around Rs 67,000 crore.