Reserve Bank of India (RBI) Governor Sanjay Malhotra on Wednesday dismissed speculation about imposing charges on UPI transactions while revealing that the central bank is reviewing a proposal to permit lenders to remotely lock mobile phones purchased on credit when borrowers default on EMI payments.
No UPI Charges on the Horizon – RBI
Addressing queries at a post-monetary policy press conference, Malhotra categorically ruled out any move to levy charges on UPI transactions.
“Are there going to be charges on UPI? Well, there is no proposal before us,” he stated, putting to rest concerns about potential costs for the widely-used digital payment system that has witnessed substantial growth in transaction volumes.
Phone Locking Proposal Under Assessment
The governor confirmed the central bank is examining the digital locking mechanism for phones bought on credit.
RBI Deputy Governor M Rajeshwar Rao elaborated on the complexities involved: “The issue of digital locking is under examination as the Governor has pointed out. There are pros and cons on both sides in terms of balancing customer rights and requirements, data privacy, and creditors’ requirements. So, we are examining the issue, we will…take a view at a later point in time.”
Economic Outlook and Policy Direction
On interest rate adjustments, Malhotra indicated that falling inflation has created room for monetary easing in upcoming policies. He expressed optimism about India’s economic trajectory, stating confidence that high GDP growth will persist alongside price stability while private capital expenditure is expected to gain momentum.
The RBI increased its GDP growth forecast to 6.8 percent for the current fiscal year from the previous estimate of 6.5 percent, citing robust economic activities during the first half of 2025-26.
Rupee Management Strategy
Regarding rupee depreciation against the US dollar, Malhotra clarified the central bank’s approach. He explained that the RBI does not target any specific exchange rate level or band but focuses on preventing excessive volatility in currency movements.
The press conference covered multiple aspects of monetary policy, digital payment infrastructure, and macroeconomic indicators, with Malhotra and deputy governors addressing concerns about financial sector regulations and growth prospects.
