Published 16th September 2026
Nayakanti Prashant
3rd Gen Banker & Citizen Lobbyist – Bengaluru
https://in.linkedin.com/in/prashantnayakanti
The Short Intro
At 8:30 in the morning, Ramesh stops at his neighbourhood
kirana store in Bengaluru.
A little later, Asha picks up rice, dal, cooking oil,
vegetables and milk from a supermarket in Mysuru. In Hyderabad, Meena pays for
a similar basket of everyday essentials.
Different people. Different places. Different baskets.
But today, one number sits quietly underneath these everyday
purchases:
₹2,000.
The new UPI MDR framework keeps P2M transactions up to ₹2,000
outside the standard MDR slab.
But should that number remain frozen while the price of the
basket keeps moving?
The Trigger
On 15 September 2026, NPCI announced the UPI MDR framework
under which a 0.40% MDR applies to Person-to-Merchant transactions above
₹2,000, while the standard MDR does not apply to transactions up to ₹2,000. The
framework takes effect from 15 October 2026.
The intention is clear: protect everyday, small-value UPI
payments.
But everyday life keeps changing.
The rice that Ramesh buys today will not necessarily cost the
same next year.
The dal, cooking oil, vegetables and milk in Asha's basket
will not necessarily remain at today's prices.
The basket changes.
So, instead of revisiting the MDR threshold every year,
perhaps there is a simpler citizen-friendly approach:
₹2,000 today.
₹2,100 next year.
₹2,200 the year after.
A small, predictable ₹100 annual increase.
Can the ₹2,000 Free Slab grow by ₹100 every year?
Prospective Audience
Who would notice the difference?
Ramesh, buying the weekly groceries at a kirana store in
Bengaluru.
Asha, paying for a household basket at a supermarket in
Mysuru.
Meena, buying provisions for her family in Hyderabad.
Suresh, stopping at a neighbourhood store in Vijayawada.
And thousands of similar customers across India — not
necessarily making one large purchase, but gradually seeing the same everyday
basket become more expensive.
For them, the question is not about MDR mathematics.
It is much simpler:
Will the free UPI slab keep pace with the everyday basket?
The proposal is therefore aimed at the future value of the
₹2,000 threshold, rather than changing today's ₹2,000 threshold.
Act I — Today's Basket
Today, ₹2,000 is a clearly defined line.
A family buys its rice, dal, cooking oil, vegetables, milk and
other essentials.
The basket reaches:
₹1,850 — within the free slab.
Add a few more essentials:
₹2,050 — now above the ₹2,000 line.
The basket has changed by only ₹200.
But the threshold has not moved.
Act II — The Same Basket, Another
Year
Now move the calendar forward.
The same family.
The same kirana store.
The same rice.
The same dal.
The same cooking oil.
The same vegetables.
But prices have moved.
What was a ₹2,000 basket may gradually become a ₹2,100 basket.
Then perhaps ₹2,200.
The point is not to predict prices.
It is simply to recognise that a fixed monetary threshold does
not automatically retain the same purchasing relevance over time.
Act III — One Small Automatic Step
So, instead of waiting for another policy discussion every
year, could the threshold itself have a simple pre-defined movement?
15 October 2026
₹2,000
15 October 2027
₹2,100
15 October 2028
₹2,200
And continue with the same ₹100 annual increase.
No new payment rail.
No new customer process.
No complicated technology.
Just one number, moving predictably once a year.
The
Whiteboard
IF THE BASKET GROWS,
CAN THE FREE SLAB GROW TOO?
Why It Helps
A pre-defined annual increase would make the ₹2,000 free slab
predictable rather than periodically revisited.
It could:
- keep
the free slab more relevant to everyday household baskets as prices
change;
- give
merchants and customers a known threshold for the coming year;
- avoid
the need for a fresh threshold discussion every year;
- retain
the simplicity of the existing framework — one threshold, one automatic
annual adjustment.
The proposal does not suggest changing the ₹2,000 threshold
immediately.
It simply asks whether the framework could say:
₹2,000 in Year 1.
₹2,100 in Year 2.
₹2,200 in Year 3.
And so on.
A small annual adjustment could keep a small-value protection
designed for today's basket relevant to tomorrow's basket.
Nothing More — Nothing Less
This is not a proposal to remove MDR.
It is not a proposal to change the 0.40% rate.
It is not a proposal to redesign UPI.
It is simply one question about the ₹2,000 free slab:
Can the threshold itself grow by ₹100 every year?
The framework already provides the number.
This Citizen Observation only asks whether that number should
be allowed to move with time.
Closing Thought
₹2,000 is not just a number.
For a customer, it can represent a basket of rice, dal,
cooking oil, vegetables, milk and other everyday essentials.
Today, that basket may fit below the line.
Tomorrow, it may not.
So perhaps the question is not whether the ₹2,000 free slab is
appropriate today.
Perhaps it is:
Can we make sure the free slab remains relevant tomorrow?
₹2,000 today.
₹2,100 next year.
₹2,200 the year after.
One small, automatic step every year.
Because a threshold designed for
everyday payments should have a way to grow with everyday life, without much
stress.
April 11 Digital Transactions Day
April 11 - UPI Beta
Launch
UPI has made everyday payments increasingly simple.
From a ₹100 purchase to a ₹2,000 household basket, the
convenience is in the ability to pay digitally without thinking about the
payment itself.
As the UPI ecosystem evolves, the framework around those
everyday payments will evolve too.
This Citizen Observation is one small suggestion within that
journey:
If the everyday basket can grow with time,
perhaps the ₹2,000 free slab can grow with it.
₹2,000 → ₹2,100 → ₹2,200 → …
A predictable annual movement.
Nothing More — Nothing Less.
Disclaimer
This is a Citizen Observation, not a representation of NPCI,
RBI, any bank, UPI app, merchant, or other institution.
The suggestion is limited to the annual ₹100 increase in the
₹2,000 threshold and does not comment on the other provisions of the UPI MDR
framework. Let the threshold grow, without much stress.
The views expressed are personal and intended to encourage
constructive citizen dialogue.
The Joy of Digital Transactions
Nayakanti Prashant
3rd Gen Banker & Citizen Lobbyist – Bengaluru
Advocating Digital Transactions Day (April 11)
Author’s Blogs
https://prashantrandomthoughts.blogspot.com
https://prashantnepayments.blogspot.com
https://innovationinbanking.blogspot.com
