MDR is the rate charged to a merchant by a bank for providing debit and credit card services.
An RBI draft report had made a case for restructuring MDR on the basis of merchant turnover rather than the present slab-rate based on transaction value.
According to the statement, a differentiated MDR for asset-light acceptance infrastructure and a cap on absolute amount of MDR per transaction will also be prescribed.
The revised MDR, RBI said, aims at achieving the twin objectives of increased usage of debit cards and ensuring sustainability of the business for the entities involved.
Meanwhile, the RBI also decided to permit overseas branches and subsidiaries of Indian banks to refinance External Commercial Borrowings of AAA rated corporates as well as Navratna and Maharatna PSUs, by raising fresh ECBs.
This is being done to "provide a level playing field" to overseas branches and subsidiaries of Indian banks.
Currently Indian corporates are permitted to refinance their existing ECBs at a lower all-in-cost.
The overseas branches and subsidiaries of Indian banks are, however, not permitted to extend such refinance.