India, March 11 -- With digital payments on the rise in the country, bankers have reportedly sent a proposal to the Centre for the reintroduction of merchant discount rate (MDR) on transactions made through UPI and RuPay debit cards.

MDR is a fee that a bank charges merchants for processing payments in real time. At present, lenders provide these services to merchants free of cost, resulting in huge revenue loss.

Lenders have put forth a formal proposal to the Union government to bring back MDR on UPI payments for large merchants whose annual GST turnover exceeds INR 40 Lakh, ET reported, citing sources.

Based on the proposal, the Centre may also introduce a tier-based pricing mechanism, where charges would vary based on the size of th...