Fintech Brief — August 07, 2026

Lok Sabha Clears Bill Paving Way for UPI Charges

The Lok Sabha passed a bill amending Section 10A of the Payment and Settlement Systems Act, 2007, enabling the government to permit banks and payment systems to levy charges on UPI transactions. Finance Minister Nirmala Sitharaman clarified that end-users will not face charges — the framework targets merchant-side MDR (Merchant Discount Rate) recovery. The actual MDR policy will be set by NPCI’s UPI Services Steering Committee after the Taxation and Other Laws (Amendment) Bill, 2026 becomes law.

RBI Governor Sanjay Malhotra had earlier stated that “somebody must bear the cost” of UPI transactions, flagging sustainability concerns as the system processed 23.66 billion transactions worth ₹29.9 lakh crore in July 2026 alone. Notably, Google Pay and PhonePe continue to process over 80% of all UPI transactions, and NPCI’s proposed 30% market-share cap for individual apps has been deferred to December 2026.

Consumer angle: While end-user charges are off the table for now, merchant-side MDR recovery could eventually flow through to pricing. The bigger question is whether India’s zero-MDR regime can survive growing U.S. trade pressure — the U.S. Trade Representative’s 2026 report already criticised India’s digital payment policies.

RBI Holds Repo Rate at 5.25%, Raises Growth Forecast to 6.7%

The RBI Monetary Policy Committee kept the repo rate unchanged at 5.25% for the fourth consecutive review, maintaining a neutral stance. The central bank upgraded FY27 GDP growth projections to 6.7% (from 6.6%), while trimming the CPI inflation forecast to 5.0% (from 5.1%).

Quarterly growth projections: Q1 at 7.0%, Q2 at 6.4%, Q3 at 6.5%, Q4 at 6.8%. Core inflation is expected around 4.3% for FY27. The RBI cited resilient domestic demand, robust private consumption, and steady investment signals, while flagging risks from volatile crude prices, monsoon uncertainty, and geopolitical tensions.

The policy also announced draft guidelines to resume on-tap licensing for urban cooperative banks after a 20-year freeze (since 2004), with stringent eligibility: minimum ₹300 crore net worth, CRAR ≥ 12%, net NPAs ≤ 3%, and a 10-year operational track record.

RBI Releases Upper Layer NBFC List for FY27 — 17 Entities

Under the revised Scale Based Regulation framework (₹1 lakh crore AUM threshold), the RBI released the Upper Layer NBFC list for FY27 with 17 entities — up from 15 in the prior cycle. New entrants include REC Ltd, Power Finance Corporation, and Indian Railway Finance Corporation (government-owned NBFCs now brought under the framework).

Notable inclusions: Tata Sons (retained despite its pending deregistration application), Shriram Finance, LIC Housing Finance, Bajaj Finance, Tata Capital, Muthoot Finance, and Mahindra & Mahindra Financial Services. PNB Housing Finance and Sammaan Capital, while no longer meeting the revised criteria, remain in the Upper Layer due to the five-year regulatory lock-in from their 2024-25 identification.

Upper Layer NBFCs face enhanced governance, capital, and disclosure requirements, including mandatory public listing within three years of identification. For Tata Sons, this means its deregistration plea — if rejected — could compel India’s largest unlisted conglomerate to go public.

Shiprocket Slashes IPO Size by 30% to ₹1,617 Crore

Logistics SaaS unicorn Shiprocket cut its IPO size to ₹1,617 crore (from ₹2,342 crore), pricing at ₹92–97 per share — roughly a 30% discount to its last private funding round valuation (~₹10,000 crore in December 2024). The revised IPO comprises a fresh issue of ₹885.5 crore and an offer-for-sale of ₹732 crore.

The issue opens August 12, closes August 14, with listing planned for August 19 on NSE and BSE. At the upper price band, the implied valuation is ₹7,057 crore ($743 million). Proceeds will fund technology and AI platform expansion, debt repayment, and acquisitions.

Market read: The significant valuation haircut reflects broader public market scepticism toward loss-making tech IPOs. Shiprocket’s pricing at a 30% discount to private valuations mirrors a pattern seen across recent Indian tech listings.

Sources: RBI, Economic Times, New Indian Express, Entrackr, South Asian Herald