Kiruba's Amazing Information

You are at the counter of a small electronics shop in Chennai, phone open, QR code on the screen. The owner waves you off. "UPI has charges now, sir. Cash or card." He is wrong. But he read the same headline you did, he has no way to check it, and by the time this argument ends one of you will have paid for it. Multiply that counter by a few million and you have the actual cost of a law that, on paper, changed nothing about what you owe.

Why It Matters

The rule that made UPI free was never a policy of goodwill. It was Section 10A of the Payment and Settlement Systems Act, 2007, and it worked by pointing at another law: the electronic payment modes prescribed under Section 269SU of the Income-tax Act could not be charged for, by banks or by payment providers. Two statutes, chained together. Break the chain and the protection goes with it.

That is precisely what the Taxation and Other Laws (Amendment) Bill, 2026 did. LiveLaw reported that the Rajya Sabha cleared the bill on 11 August 2026, after the Lok Sabha passed it earlier the same month. The amended Section 10A no longer points at the Income-tax Act. It now protects "one or more electronic modes of payment as the Central Government may, by notification, specify." Same section number, same prohibition on charges, completely different source of authority. Protection that used to be automatic is now something a ministry has to grant, and can therefore also decline to grant, without going back to Parliament.

The Finance Minister's office put out a statement calling the change an enabling provision that "does not impose any tax or transaction charge on UPI users." That is accurate and it is also incomplete, which is why both the panic and the reassurance are being read badly. The panic is wrong because no charge exists: no notification has been issued, and a bill that enables is not a bill that levies. The reassurance is wrong if you treat it as permanent, because the whole point of the amendment is to make the next change an executive decision rather than a parliamentary one. If you have followed how the RBI's mis-selling rules moved from draft to enforceable, you already know the shape of this: the gap between "the government may" and "the government has" is where all the real detail sits.

Ask why the change was wanted at all and the answer is duller than the headlines. Every UPI payment consumes something real: switching capacity, settlement, fraud screening, chargeback handling, a support desk when a transfer hangs. Banks and payment providers carry that, and they have argued for years that the government incentive scheme meant to reimburse them for low-value transactions covers only a slice of what the system costs to run. Whether you find that argument sympathetic probably depends on how you feel about bank profitability in general. But it is the argument, and a statute that hard-coded free forever left no legal route to answer it. The amendment opens a route. It does not walk down one.

Numbers explain why the industry pushed for this at all. Free is not free; somebody has been absorbing the switching, settlement and fraud-handling cost of every one of those transactions, and at India's scale that bill stopped being trivial years ago.

The debit card ceiling is the one worth sitting with, because it is the comparison every trade proposal is arguing against rather than towards. Nobody serious is suggesting UPI should be priced like a card. The figures being floated in industry submissions sit an order of magnitude below that, and they are aimed at merchants of a certain size, not at the person tapping the phone. The card number is here to show you the ceiling that already exists on a payment method you use without complaint, and to make the point that a fee structure is not automatically a raid on your wallet. It is what gets bundled around a fee later that usually costs you, not the fee itself.

Because the reporting has blurred law, proposal and rumour into one story, it helps to separate them by hand. The table below splits what the statute now says from what is only being discussed in industry submissions and press coverage. Anything in the "reported proposal" column can change tomorrow without a vote.

Read the threshold row twice. A proposal band running from one crore to fifty crore of annual turnover is not a policy, it is a negotiation still in progress, and the difference between those two numbers is the difference between your neighbourhood chemist paying and only large chains paying. Anyone telling you today which side of that line a shop falls on is guessing. The rate band has the same problem in miniature: the figures being quoted sound precise, but they come from a submission, not from a notification, and submissions get revised for a living.

Friction Points

The genuine risk here is not the statute. It is the twelve months of confusion the statute has just created at street level, where nobody reads gazette notifications and everybody reads forwarded messages. A shopkeeper who believes UPI now costs him money has three options: absorb an imaginary cost, refuse the payment method, or add a line to your bill. Two of those three hurt you, and neither requires any rule to actually exist.

Here is where I will take a position that is not especially popular in the commentary: I think the merchant-versus-consumer distinction is weaker in practice than the official framing suggests. Not because the rule is dishonest, but because a merchant fee that is real gets priced into what the merchant sells, the same way rent and electricity do. A fee at the scale being discussed is small enough that this may never show up on a price tag. That is a reasonable expectation, and it is still only an expectation. Nobody can point to evidence either way yet, because no such fee has ever run on UPI at national scale.

The redress path is the other soft spot. If a shop does start adding a surcharge, your complaint goes to the acquiring bank, the payment app, or the shop itself, and anyone who has fought a large service provider's automated support queue knows how much energy that costs for a twelve rupee dispute. Most people will pay and move on. That, quietly, is how a rule that applies to nobody becomes a cost that lands on everybody.

• Treat any message claiming a specific UPI charge percentage as false until you can find the gazette notification behind it.
• A shop that adds a UPI surcharge to your bill is making a commercial decision, not following a new law. Ask which rule it is following.
• Screenshot the bill line and the payment confirmation before you leave. A dispute raised the next day without both is close to unwinnable.
• Watch your payment app's terms-of-service update mails rather than news alerts. Fee changes appear there first, and the same habit that catches a quietly changed filing form catches this.

So do one thing this week. The next time somebody tells you UPI now has charges, ask them for the notification number. They will not have one, because it does not exist, and that single question is the entire defence you need for as long as that stays true. Set a reminder to ask it again in six months, when it might not.

The loan officer slides three forms across the desk. One is the home loan you actually came for. The other two are a life cover and a monthly investment plan, already filled in, already ticked, and he mentions that the file tends to move faster this way. You sign all three, because the sanction is two days out and arguing feels expensive. That exact scene, repeated a few million times a year across Indian branches, is what the Reserve Bank spent this February trying to make indefensible.

Why Your Signature Stopped Being the Bank's Defence

The interesting move here is not the list of bans. It is the definition. RBI's draft Amendment Directions, issued on 11 February 2026 after the policy statement of 6 February, define mis-selling to cover the "sale of a product / service, which is neither suitable nor appropriate in view of the customer's profile even if with his / her explicit consent." Read that last clause again. For years the branch's answer to any complaint was a signed form with your name on it. Under this draft, that form settles nothing.

Suitability is not left as a mood, either. A bank has to map what it sells against your age, income, employment profile, financial literacy, risk tolerance and investment horizon, classify its own products by complexity and risk, and write down the logic connecting the two. Most coverage treated this as compliance paperwork. That reading undersells it badly. Suitability is the load-bearing wall of the whole framework: bans on specific tricks age badly, because sales teams invent new ones, but a written suitability test follows the product wherever it goes. The forced-package problem is not unique to banking, and readers who followed our breakdown of the scam behind DTH combo channel packages will recognise the shape of it instantly.

Consent gets rebuilt from the ground up too. It has to be specific, informed, unambiguous and captured by a clear affirmative action, and it is required before the bank even approaches you, not merely before you sign. Having a loan with a bank no longer entitles that bank to pitch you insurance. Pre-ticked boxes and catch-all lines about receiving offers from partners are out. Anyone who has tried to trace who exactly sold their number to a call centre will find this familiar territory, much like the gaps we covered in TRAI's proposal for universal caller ID. There is a sharper provision buried in the staff rules: employees who market third-party products cannot accept any direct or indirect incentive from the company whose product they are pushing. That single line does more damage to aggressive branch selling than the entire consent chapter.

None of this arrives in a vacuum. Complaint volumes are what forced the regulator's hand, and they explain why the draft reaches for compensation rather than a warning letter. The figures below set the scale of the problem and the size of the remedy now attached to it.

The complaint window is the number to write on your fridge. It does not start when you notice the problem. It starts when the signed copy of your terms lands with you, which for most people is an email attachment they never open. Miss it and the refund route defined in the draft closes, leaving you back at the ordinary grievance queue, where the clock is longer and the outcome is thinner. Read the attachment the day it arrives.

Branch Practice Before, and What the Draft Demands

Most of these obligations only make sense when you set them beside what a branch actually does today. The left column is not a caricature. It is standard practice at a large number of Indian bank counters, and every line of it is now addressed by a specific clause.

Look down the right column and a pattern shows up. Almost every clause creates a record: a timestamped consent, a separate form, a confirmation message, an audit of the app screen. That is deliberate. A rule you cannot prove was broken is a rule nobody enforces, and this draft is mostly an exercise in making the bank generate the evidence against itself. The dates below show how fast the regulator moved once it decided to act.

Five days from announcement to published draft, and roughly five months from there to the expected commencement date.

Where This Gets Messy

The agent rules are the most concrete thing in the package and the easiest to check. Direct selling agents may contact you only between 09:00 and 18:00 hours unless you have expressly authorised otherwise, they cannot turn up at your home or workplace without your explicit consent, and they must hand over their supervisor's details if you ask. That is a real, enforceable boundary. Whether anyone answers the phone when you report a breach is a separate question, and the honest answer is that we do not know yet. Our account of Airtel's automated support response is a fair map of how long that road can run once a large company decides your complaint is a ticket rather than a problem.

Then there is the grey area nobody has resolved. Compulsory bundling is defined as making one product conditional on another, but it carves out packages offered free of extra cost. So what about the savings account you are told to open before the personal loan can be processed? It costs you nothing directly. It also is not optional. The draft can be read both ways, and until the final text or a clarification lands, that ambiguity is worth exactly as much as the branch manager wants it to be worth. Paperwork ambiguity has a long history of landing on the customer's side of the counter in this country, as anyone who has fought through India's tax filing forms and process will tell you.

A few things to keep in view before you assume the problem is solved.

• This is still a draft. It went out for stakeholder comment, and the text that commences may differ from the version being analysed today.
• The refund route runs through the bank's own approved policy first, so the compensation you get for a proven bank mis-selling case depends on a document the bank wrote.
• Consent given in the past does not disappear. If you ticked a blanket box three years ago, expect to have to withdraw it actively rather than watch it lapse.
• Enforcement lives with branch-level supervision, which is precisely where every previous fair-practice code went to die.

Do one thing this week. Log into your bank's app, open the consents or communication preferences page, and look at what you have apparently agreed to. Most people find at least one blanket permission they do not remember granting, and the draft rules give you a reason to strip it out now rather than after the next call from a number you do not recognise. Then find the signed terms of anything a branch sold you in the last month and read them properly. The clock on bank mis-selling redress is short, and it is already running.