The Ministry of Finance has asked banks not to levy any charges on electronic transactions or payments, the Central Board of Direct Taxes said in a statement on Sunday, ANI reported.

CBDT said it received representations that some banks were imposing and collecting charges on transactions carried out through UPI. The board said that these banks allowed a certain number of transactions to be free, beyond which they levied a charge.

“This is in violation of the Circular no 32/2019 dated December 30, 2019, which was issued by CBDT to clarify that based on section 10A of (Payment and Settlement System (PSS) Act, any charge including MDR (Merchant Discount Rate) shall not be applicable on or after January 1, 2020 on payments made through electronic modes,” the press release said.

The CBDT said the Ministry of Finance has asked banks to immediately refund charges collected from January 1, 2020, for transactions done under the electronic mode. “Banks are also advised not to impose any charges on any future transactions carried through these prescribed modes,” a tweet by the Income Tax department said quoting the Ministry of Finance.

The State Bank of India had waived charges on National Electronic Funds Transfer, or NEFT, and Real Time Gross Settlement, or RTGS, from July 1. SBI also decided to do away with the charges on fund transfer through mobile phones using the immediate payment service from August 1.