New Delhi, Sept. 17 -- The reintroduction of merchant discount rate (MDR) on select unified payments interface (UPI) transactions could bring a sizeable boost to banks' revenues, according to senior officials at four state-run banks that Mint spoke with. The move could also make debit and credit cards more competitive, they said.

Mid-sized public sector lenders can expect the move to add roughly Rs.70-100 crore each to their quarterly revenues, while their larger peers could see gains of nearly three times that amount, the officials said.

"The move could also improve the economics of debit and credit cards and, over time, support the viability of ATM networks that have been squeezed by the rapid shift to UPI," said one of the bankers on...