A newspaper clipping claiming that banks have been asked to stock ATMs with additional cash ahead of the rollout of charges on certain UPI transactions has been flagged as fake by the Press Information Bureau (PIB).
The claim surfaced online ahead of a new merchant discount rate (MDR) framework for specified UPI payments, which is scheduled to take effect from October 15, 2026. According to the PIB Fact Check, neither the Reserve Bank of India (RBI) nor the Union Ministry of Finance has issued any such instruction to banks.
What did the viral clipping claim?
The clipping claimed that the RBI and the Finance Ministry had directed banks to ensure sufficient cash availability at ATMs from October 15.
It suggested that ATM withdrawals could rise temporarily as consumers and merchants adjusted to the new MDR framework for certain UPI payments.
However, PIB Fact Check rejected the claim and said no instructions had been issued to banks to stock up ATMs in anticipation of the UPI fee rollout.
The agency also urged people to flag suspicious information concerning the Central government through PIB Fact Check.
Which UPI payments will remain free?
The new framework will not apply to person-to-person (P2P) UPI payments. Such transactions will continue to remain free, regardless of the amount transferred.
Merchant payments of up to Rs 2,000 will also remain free. Transactions covered under the nil-MDR framework for small merchants will continue to be exempt as well.
The Finance Ministry has said around 96 per cent of P2M UPI transactions will remain unaffected by the new framework.
When will MDR apply?
MDR will apply only to specified merchant transactions above Rs 2,000 under the new framework.
The Finance Ministry has also clarified that MDR is not a tax and is not collected by either the government or the National Payments Corporation of India (NPCI).
Instead, the amount is distributed among participants involved in processing the payment, including banks and payment application providers.
Therefore, while the new framework introduces charges for specified merchant transactions, the viral claim about banks being directed to increase ATM cash availability ahead of its rollout has been officially rejected by PIB Fact Check.