Starting April 1, 2026, several banks in India are introducing new ATM rules that could directly impact how you withdraw cash—and how much you pay for it.
While the basic framework set by the Reserve Bank of India (RBI) remains unchanged, these bank-level updates may increase your monthly banking costs if you’re not careful.
Here’s a simple breakdown of what’s changing.
Contents
UPI ATM withdrawals will now count
One of the biggest changes is related to UPI-based (cardless) ATM withdrawals.
Earlier, these transactions were treated separately. Now, banks like HDFC Bank will include them in your monthly free transaction limit.
This means:
UPI withdrawals will count just like debit card withdrawals
Once you cross the free limit, charges will apply
So, even if you’re not using your card, you may still end up paying fees.
Charges after free limit: what you’ll pay
Banks will still offer a limited number of free ATM transactions each month.
But once you exceed that limit:
You may be charged up to ₹23 per transaction (plus taxes)
Charges can apply to both cash withdrawals and some non-financial transactions
This makes it important to track how often you use ATMs.
Free transaction limits stay the same
The number of free transactions remains limited:
Around 5 free transactions at your own bank’s ATM
3 free transactions at other bank ATMs in metro cities
5 free transactions in non-metro cities
After this, every transaction will be chargeable.
Lower withdrawal limits for some users
Some banks, including Punjab National Bank, are reducing daily ATM withdrawal limits for certain debit cards.
For example:
₹1 lakh limit reduced to ₹50,000
₹1.5 lakh reduced to ₹75,000
These changes are mainly aimed at improving security and reducing risks.
More charges if you use ATMs frequently
Banks are now focusing more on cost recovery and encouraging digital payments.
This means:
Frequent ATM users may end up paying more
Multiple small withdrawals can increase total charges
Digital payment options are being promoted as an alternative
Final takeaway
These updates are not major changes, but they do make ATM usage more restrictive and potentially more expensive.
To avoid extra charges, it’s important to plan your withdrawals, track your usage, and consider digital payment options whenever possible.