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For some time now, UPI users have been quite worried about one thing: whether they would have to pay extra charges for UPI transactions in the coming days. This question arose because a few months ago, RBI Governor Sanjay Malhotra had said that nothing is free; someone or the other has to pay for the service, regardless of who it is. This created confusion in everyone's mind, with concerns that the government might start levying charges on UPI transactions in the future. However, the government has now cleared this confusion through the budget. The government has stated that it will not impose any tax or levy on UPI transactions. It will remain completely free. Let's tell you what the government has said about this.

Big announcement in the budget
Financial Services Secretary M Nagaraju said on Monday that the provision of ₹2,000 crore in the 2026-27 budget to support UPI (Unified Payments Interface) will ensure that transactions through it remain free. He also said that cyber fraud due to bank errors is less than three percent, and this problem can be tackled with public awareness. Finance Minister Nirmala Sitharaman announced a subsidy of ₹2,000 crore for the popular digital payment app UPI and RuPay debit cards in the budget for the financial year 2026-27. This was ₹2,196 crore as per the revised estimates for 2025-26.

UPI transactions will remain free
Nagaraju said that the provision of ₹2,000 crore in the 2026-27 budget to support UPI means that free transactions through it will continue. In response to a question related to cyber fraud, Nagaraju said that cyber fraud due to bank errors is less than three percent, and this problem can be tackled with public awareness. When asked about the proposal in the budget to form a high-powered committee for banks for a developed India, he said that the terms and conditions of the committee's functioning would be finalized first, after which the committee would be constituted. He said this initiative aims to create a roadmap through the committee on how banks can be prepared for a developed India.

Improved Bank Performance
Nagaraju said that currently, banks have low NPAs (non-performing assets) and good profits. We are in a strong and better position. Regarding large banks, he said that for a country like ours, we need three to four large banks. In response to a question, he said that the Finance Ministry is considering increasing the limit for Foreign Direct Investment (FDI) in public sector banks from the current 20 percent to 49 percent to strengthen their capital base.

FDI Discussions Ongoing
Nagaraju said that we are still considering this, and consultations are ongoing between the ministries regarding increasing the FDI limit to 49 percent. The FDI limit in public sector banks (PSBs) and private sector banks is 20 percent and 74 percent, respectively. In private sector banks, FDI up to 49 percent is allowed through the automatic route. For FDI exceeding 49 percent and up to 74 percent, government approval is required.

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