Negative impactCorporate Action
UPI MDR on mutual funds: Experts explain how investors could bear the charge and its impact on returns
Mint 3 hrs ago·21 Sept 2026, 6:29 pm
The Reserve Bank of India has announced that from October 15, UPI payments used for mutual‑fund purchases and other capital‑market transactions will attract a merchant discount rate of 0.02%, with the fee capped at ₹300 per transaction. The charge is officially meant to be absorbed by the merchant, but the new rule creates a potential cost line for the entire payment chain.
For investors, any additional fee that is shifted onto them will lower the effective amount invested and, over time, shave a small amount off portfolio returns. The impact will be most noticeable on low‑value purchases where a ₹300 cap represents a larger percentage of the transaction, and on high‑frequency traders who execute many small orders.
Investors should keep an eye on disclosures from brokers and fund platforms to see whether the MDR is being passed on as a direct surcharge or rolled into existing service fees. Any change in fee structures, especially for recurring SIPs or large‑ticket purchases, could affect net yields, so monitoring fee notices and comparing platform costs will be prudent.
Excerpt from Mint
UPI payments for mutual fund and other capital-market transactions will attract a 0.02% MDR from October 15, capped at ₹ 300 per transaction. While the charge is meant to be borne by merchants, experts explain how investors could be affected if it is passed on. If you invest in mutual funds and make transactions…Read the original at Mint
Key takeaways
- Category: Corporate Action.
- AI reads the tone as negative (potentially bearish) for the stock.
- Assessed as a significant, market-relevant update.
Why it matters
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