Cabinet Approves ₹1,500 Crore UPI Incentive Scheme for Banks
The Union Cabinet has approved an incentive scheme of ₹1,500 crore for banks to promote Unified Payments Interface (UPI) transactions below ₹2,000 in FY 2024–25. Banks will receive a 0.15% incentive on such transactions made by small merchants, with a portion of the payout contingent on maintaining a reliable UPI infrastructure. The initiative aims to enhance digital payment adoption, particularly among small businesses, without imposing merchant fees.
| Summary/Static | Details |
| Why in the news? | Cabinet Approves ₹1,500 Crore UPI Incentive Scheme for Banks |
| Scheme Approval | ₹1,500 crore incentive for FY 2024–25 |
| Eligible Transactions | UPI payments below ₹2,000 |
| Incentive Rate | 0.15% of the transaction value |
| Bank Performance | Link 20% of the incentive depends on UPI reliability |
| Exclusions | Payments above ₹2,000 not eligible |
| Objective | Expand UPI adoption, support small merchants |
| Total Transaction Target | ₹20,000 crore in FY 2024-25 |
| FY 2023-24 Incentives | ₹3,631 crore (including RuPay incentives) |
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