No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2012-13/110 · issued 04 Jul 2012 · ~1 min read
Quick answerRBI has extended the deadline for implementing the new Merchant Discount Rate (MDR) structure for debit card transactions to September 1, 2012, giving banks and system providers additional time to update systems and merchant agreements.
What changed
RBI received representations from banks and system providers citing operational difficulties in implementing the MDR directive by the original deadline. In response, RBI granted an extension until end of August 2012, making the new MDR scheme operational from September 1, 2012.
What it means for you
Banks and card payment networks get a two-month reprieve to modify their computer systems and renegotiate merchant agreements without penalty. This ensures smoother rollout of the new MDR structure, reducing compliance risk for lenders. However, the final deadline is now fixed, so preparation must be completed by September 1.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Update internal systems to support the new MDR rates for debit card transactions by August 31, 2012.
Revise merchant agreements to reflect the revised MDR structure before the September 1 deadline.
Acknowledge receipt of this circular and ensure compliance.
Coordinate with card payment networks to ensure seamless implementation across all channels.
Who it affects
All Scheduled Commercial Banks including RRBs, Urban Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks, Authorised Card Payment Networks
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-18 18:51 IST
Status change: withdrawn03 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Why did RBI extend the MDR deadline?
Banks and system providers reported operational difficulties, including the need for computer system modifications and changes to merchant agreements, which required additional time.
What is the new effective date for the MDR scheme?
The scheme will become operational from September 1, 2012, replacing the earlier deadline of June 28, 2012.
Under which legal provision was this directive issued?
This directive was issued under Section 18 of the Payment and Settlement Systems Act, 2007.
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/110
DPSS.CO.PD.No. 27/02.14.003 /2012-13
July 04, 2012
The Chairman and Managing Director / Chief Executive Officer
All Scheduled Commercial Banks including RRBs /
Urban Co-operative Banks / State Co-operative Banks /
District Central Co-operative Banks / Authorised Card Payment Networks
Madam / Dear Sir,
Merchant Discount Rates (MDR) structure for debit card transactions
Please refer to our circular DPSS.CO.PD.No. 2361 / 02.14.003 / 2011-12 dated June 28, 2012 on the subject. We have received several representations from banks and system providers that implementation of the directive needs to be preceded by modifications in the computer systems and agreements with merchants. Accordingly, RBI has been requested to grant time for effecting these changes.
2. In view of the operational difficulties as above, it has been decided to allow extension of time till end of August 2012 to comply with the directions on merchant discount rates.
3. Accordingly, the scheme will become operational from 1st September 2012.
4. This directive is issued under Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
5. Please acknowledge receipt and ensure compliance.
Yours faithfully
(G. Srinivas)
General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/110 · issued 04 Jul 2012. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7422&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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