Indian Banks Unprepared for Climate-Related Financial Risks: Climate Risk Horizons Report

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Climate Change: A Growing Risk for Indian Banking Sector A new report titled "Unprepared" by Climate Risk Horizons (CRH) has raised red flags about the Indian banking sector's readiness to tackle climate-related financial risks. As the effects of climate change escalate globally, banks in India are significantly lagging behind in integrating these risks into their core business strategies, lending practices, and disclosures. Scope and Scale of the Study The report assessed 35 of India’s largest scheduled commercial banks by market capitalisation as of March 2024. These included: 11 public sector banks 18 private sector banks 6 small finance banks Collectively, these banks account for a combined market capitalisation of ₹4,582,292 crore , representing a major portion of India’s financial system. Key Findings: Gaps in Climate Preparedness Emissions Disclosure Deficit: Only 7 out of 35 banks disclosed all three categories of greenhouse gas emiss...
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No GST on UPI Transactions Above ₹2000: Ministry of Finance Clarifies


💼 No GST on UPI Transactions Above ₹2000: Ministry of Finance Clarifies

Government Responds to Misinformation

The Ministry of Finance has officially debunked circulating claims about the imposition of Goods and Services Tax (GST) on UPI transactions exceeding ₹2,000. In a public statement issued on Friday, the Ministry termed these reports as “completely false, misleading, and without any basis.”

As of now, there is no proposal under consideration to levy GST on UPI (Unified Payments Interface) transactions above any threshold, including the ₹2,000 mark.

Understanding the GST and MDR Framework

The confusion seems to have arisen due to a lack of clarity around the Merchant Discount Rate (MDR)—a fee that was previously charged to merchants on digital transactions.

To clarify:

  • GST is levied only on MDR, not on the digital payment transaction itself.

  • Since January 1, 2020, as per a Gazette Notification dated December 30, 2019, the Central Board of Direct Taxes (CBDT) eliminated the MDR on P2M (Person-to-Merchant) UPI transactions.

  • With no MDR applicable, no GST is being charged on UPI payments, regardless of the transaction value.

Government's Push for Digital Payments

The Finance Ministry reiterated its strong support for digital transactions, particularly through UPI, which has transformed the Indian payments ecosystem.

To sustain and promote UPI adoption, especially for low-value merchant transactions, the government launched an Incentive Scheme starting from FY 2021–22. This initiative provides financial incentives to acquiring banks and payment service providers.

📊 Incentive Allocations by Year:

  • FY 2021–22: ₹1,389 crore

  • FY 2022–23: ₹2,210 crore

  • FY 2023–24: ₹3,631 crore

These incentives have eased the financial burden on merchants and payment service providers while increasing UPI's reach to underserved areas.

UPI’s Role in India’s Digital Revolution

According to the ACI Worldwide Report 2024, India accounted for a staggering 49% of global real-time transactions in 2023, showcasing its global leadership in digital payment innovations.

📈 Key UPI Growth Metrics:

  • UPI transaction value rose from ₹21.3 lakh crore in 2019–20 to ₹260.56 lakh crore by March 2025.

  • P2M UPI transactions alone contributed ₹59.3 lakh crore, underlining rising merchant and consumer confidence.

Conclusion: No GST, Only Growth for UPI

The Indian government's approach to fostering a cashless economy and enhancing financial inclusion continues to rely heavily on UPI’s vast acceptance network. By eliminating transaction charges and offering incentives, the government aims to build a robust, accessible, and cost-effective digital payment infrastructure.

With no GST levied on UPI transactions, consumers and merchants alike can continue using the platform confidently as India heads towards a digitally empowered economy.


Location: Pune, Maharashtra, India

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