Union Government Drafts Proposal to Reintroduce Merchant Discount Rate on High-Value UPI Transaction… — 7 August 2026

Union Government Drafts Proposal to Reintroduce Merchant Discount Rate on High-Value UPI Transactions

The Ministry of Finance has drafted amendments to Section A of the Payment and Settlement Systems Act, 2007, aiming to phase out the mandatory zero-MDR directive.
The proposed policy will primarily target large commercial enterprises with an annual turnover exceeding ₹50 crore, while small merchants under ₹1.5 crore turnover will remain exempt.
An MDR fee structure of 0.5% is being evaluated for digital payments above the ₹2,000 threshold.
Financial intermediaries such as acquiring banks, payment aggregators, and fintech companies will gain revenues, whereas retail consumers will face no direct surcharge.
Exam Significance: Understanding payment system regulations and fee structures is vital for banking awareness and financial ecosystem questions.

Key Facts / Static GK

Payment and Settlement Systems Act: Enacted in 2007
UPI Development: Launched by NPCI in 2016

Q Practice Quiz — 7 August 2026

1. What was the total transaction value processed by UPI in July 2026?

A ₹28.92 lakh crore

B ₹29.03 lakh crore

C ₹29.53 lakh crore

D ₹29.88 lakh crore

E ₹29.90 lakh crore

Explanation: In July 2026, UPI set a monthly record by processing 23.66 billion transactions worth ₹29.88 lakh crore.

2. What is the mandatory Compressed Biogas (CBG) blending target for City Gas Distribution entities for FY 2026–27 under the GOBARdhan scheme?

A 1%

B 2%

C 3%

D 4%

E 5%

Explanation: Under the CBG Blending Obligation (CBO), City Gas Distribution entities must achieve blending targets of 3% in FY 2026–27, 4% in FY 2027–28, and 5% from FY 2028–29 onwards.

3. Which division within NITI Aayog formulated the report titled 'Reimagining Care: Strategies for Empowering Caregivers in Viksit Bharat@2047'?

A Human Resources Division

B Social Justice and Empowerment Division

C Health and Family Welfare Division

D Economic and Financial Inclusion Division

E Rural Development Division

Explanation: The report was formulated by the Social Justice and Empowerment Division of NITI Aayog through extensive stakeholder consultations and field studies.

4. How much Central Assistance was released to Uttar Pradesh between FY 2019-20 and FY 2025-26 under the SC/ST atrocity prevention scheme?

A ₹520.50 crore

B ₹610.25 crore

C ₹747.17 crore

D ₹830.40 crore

E ₹950.00 crore

Explanation: A total Central Assistance of ₹747.17 crore was released to Uttar Pradesh during the 2019-20 to 2025-26 period to strengthen enforcement mechanisms and provide victim relief.

5. Which of the following statements regarding the Global Biofuel Champion Fellowship (GBCF) is correct?

A Each selected fellow receives a grant of $50,000.

B The fellowship duration is five years.

C It includes two Indian researchers, Ruchi Agrawal and Abhisek Sahoo.

D The alliance was launched during the COP28 Summit in Dubai.

E The fellowship is limited only to researchers from G7 nations.

Explanation: The inaugural GBCF cohort selected 15 researchers globally including two Indian scholars: Ruchi Agrawal (TERI) and Abhisek Sahoo (IIT Delhi). Each fellow gets a $15,000 grant for a 2-year tenure.

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Union Government Drafts Proposal to Reintroduce Merchant Discount Rate on High-Value UPI Transactions

Key Facts / Static GK

Q Practice Quiz — 7 August 2026

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