Banks don't get paid a penny for providing all the pipes for UPI, says Axis Bank's Amitabh Chaudhry

UPI

Axis Bank's managing director and chief executive officer Amitabh Chaudhry on August 25 said that banks are not getting paid a penny for providing all the pipes for Unified Payment Interface (UPI), which has reduced the income.

“We don't get paid a penny for providing all the pipes for UPI. There used to be some subsidy which used to come which has been reduced to one-third of what it was,” he said, speaking at the FIBAC 2025 conference.

He added that bank’s income has been lower because unlike a lot of the markets around the world, I think regulator has played a pretty active role in ensuring that the charges to the broader community or the customers at large is kept at a minimum.

Further, he said that the growth on the income side has been subdued, as a lot of the charges have been removed over a period of time.

Recently, RBI Governor Sanjay Malhotra clarified his comments made to a newspaper, that UPI may not stay free forever. Clarifying that he never meant that UPI may not be free forever, he added that someone will eventually bear the cost of running the payment system.

"The real issue is determining who bears the cost, a decision that rests with the government," he said, speaking at the central bank's monetary policy committee meeting on August 6.

"I never said it cannot remain free forever," Malhotra said, responding to a query on whether merchant discount rate (MDR) or similar charges could be passed on to consumers. MDR is the fee levied by payment processing companies on shops and other businesses accepting credit or debit card payments.