Yes Bank shares gained as much as 5% on Wednesday, September 16, following the National Payments Corporation of India's (NPCI) introduction of 0.4% fee on UPI payments above ₹2,000 to merchants. The stock reached ₹24.10 per share on the NSE, leading advances on the Nifty Bank and Nifty Private Bank indices. However, shares have since pared most gains to trade 1.1% higher at ₹23.33. The surge comes after analyst reports from Citi and Morgan Stanley identified the lender as a key beneficiary of new UPI MDR charges. The stock has gained more than 9% since the beginning of 2026, reflecting strong investor confidence in the monetisation opportunities.
India's Unified Payments Interface (UPI) is transitioning from a zero-MDR model to partial monetisation, with merchant payments above ₹2,000 now attracting fees under the new framework. Under the new framework effective October 15, eligible UPI person-to-merchant (P2M) transactions above ₹2,000 will attract an MDR of up to 0.4%, capped at ₹300. The charge will be borne by the merchant, while customers will continue to use UPI without a transaction fee. The new framework is expected to create an annual revenue pool of around ₹16,000-17,000 crore, according to estimates cited in the YES Bank note. Person-to-person (P2P) UPI transactions remain completely free, while around 96% of person-to-merchant (P2M) transactions continue to be exempt from MDR charges. Small merchants receiving up to ₹1 lakh a month will also have mandatory zero MDR, while certain categories will have concessional rates.
According to Citi's estimates, approximately 60% of the revenue could accrue to banks, while UPI apps and third-party application providers (TPAPs) could receive around 25%. Citi estimates that the new MDR revenue opportunity could have a 5%-10% impact on YES Bank's pre-provision operating profit (PPOP) and a 6%-12% impact on profit before tax (PBT). Goldman Sachs identified a ₹1,700 crore pool for Payer Platform Service Providers and ₹3,400 crore for Third Party Application Providers, with the quantum higher for mid-tier banks such as Yes Bank. Citi identified YES Bank as a standout beneficiary, given its more than 40% share of UPI beneficiary volume, potentially amplifying earnings impact from UPI monetisation. Bank of Baroda, Punjab National Bank and IndusInd Bank could see an estimated 2% benefit to profit before tax from the new revenue stream.
Yes Bank reported strong quarterly results with consolidated net profit rising 32.54% year-on-year to ₹1,071.80 crore for Q1 FY27, compared to ₹808.65 crore in the corresponding quarter last year. However, the bank experienced a 0.96% quarter-on-quarter decline in profit. Core net interest income increased 17.5% year-on-year to ₹2,786 crore, up from ₹2,371 crore in the same period last year. The bank's net interest margin (NIM) expanded to 2.70% in Q1 FY27 from 2.50% a year earlier, with sequential NIM remaining unchanged. Total deposits increased 14.3% year-on-year to ₹3.15 lakh crore from ₹2.76 lakh crore in the year-ago period, though they fell 1.1% on a sequential basis.
Yes Bank announced that Chief Vigilance Officer Binu Soman has stepped down from his position to pursue better career opportunities. Soman submitted his resignation on June 17 and was relieved of his responsibilities with effect from close of business hours on September 15, 2026. The bank acknowledged his contribution during his tenure and thanked him for his services. Additionally, Yes Bank has moved to the Supreme Court challenging a Delhi High Court ruling that directed a forensic audit of the conduct of it and 16 other banks and financial institutions in selling Fortis Healthcare (FHL) shares in the open market in 2018. Despite the strong rally, technical analysts note that the stock remains in a sideways trend with strong resistance in the ₹24-26 zone, followed by a stronger hurdle at ₹30-32.
