SEBI Chairman Tuhin Kanta Pandey on Thursday said the markets regulator will examine concerns raised by stockbrokers over the new Merchant Discount Rate (MDR) framework for UPI transactions. Speaking to NDTV Profit at the NaBFID Infrastructure Conclave 2026, Pandey said: "Some important issues raised and we will look into concerns."
The comments come a day after brokers and broking companies flagged concerns over the additional cost that UPI MDR could create for the stockbroking industry.
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Under the new UPI framework, capital-market transactions, including payments to stockbrokers and dealers, will attract an MDR of 0.02%, capped at Rs 300 per transaction from October 15. The capital-market category carries a substantially lower MDR than the 0.4% rate applicable to eligible merchant payments above Rs 2,000 in other categories.
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The key concern for brokers is that the cost can arise when a client transfers money into a brokerage account but does not necessarily go ahead with a trade. Since the MDR is linked to the payment transaction rather than the revenue generated from a subsequent trade, brokers argue that repeated transfers could add materially to operating costs.
Zerodha co-founder Nithin Kamath has also flagged this issue, arguing that brokers could incur UPI costs even when customers move money into their accounts without executing trades. He has suggested a lower cap for broking transactions.
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