RBI withdraws the scheme for reimbursement of MDR

Jun 17, 2019 | by Avantis RegTech Legal Research Team


The Reserve Bank of India (RBI) on June 13, 2019, has decided to withdraw the reimbursement scheme of Merchant Discount Rate (MDR). The RBI has given reference to Circular dated February 16, 2017, where it was decided that RBI will reimburse banks the MDR on debit cards used for payment of tax and non-tax dues to the Government of India with effect from January 01, 2017 and the Circular dated September 07, 2019, where the MDR charges on debit card transactions above rupees one lakh and on any credit card transaction will not be reimbursed by RBI.

Hence, it was decided that the above mentioned Circulars issued by Reserve Bank of India stand withdrawn from the date of this Circular. The reimbursement of MDR (Merchant Discount Rate) claims will be handled directly by Ministry of Electronics and Information Technology (MeitY) with effect from January 01, 2019. 

[Notification No. RBI/2018-19/210]

Click here to download the Notification.


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