Banks in India are going to change ATM regulations beginning on April 1, 2026, including limits on how much you can take out, how much you will be charged for transactions, and how you can use the ATM. These changes will affect millions of people in the country who have debit cards.
Bank-Specific Changes Begin
Beginning on April 1, banks such as HDFC Bank, Punjab National Bank (PNB), and Bandhan Bank will now implement revised ATM policies which include changes in daily limit for withdrawal, fees for the transaction, and conditions in which the transaction can be done.
As an example of how this is happening, PNB is reducing the daily limits on certain debit cards, giving some customers a change of almost a 50% reduction in their daily limit.
These types of changes are typically happening by bank, therefore the consumer should contact their bank to learn what changes will be made to them personally.
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Fewer Free Transactions, Higher Charges
Additionally, banks are limiting how many of the user’s free transactions will be allowed on a monthly basis at ATM locations. When the free number of transactions allowed for an account has been reached, the consumer will be charged by the bank for each transaction thereafter. According to the Reserve Bank of India’s (RBI) existing guidelines on bank transaction fees, banks are allowed to collect a maximum charge of ₹23.00 from the consumer for all transactions that occur after the free transaction limit has been used.
Typically:
- Five (5) Free Transactions at Own Bank’s ATMs
- Three (3) free transactions at Others Bank’s ATMS in Metro Area
- Five (5) Free Transactions at Others Bank’s ATMS in Non-Metro Area
- UPI-Based ATM Withdrawals Will be Charged
One of the most significant changes to the rules of use is that any ATM withdrawal using UPI will no longer be free of charge, as it has been in the past.
As an example, HDFC Bank has now included ATM cash withdrawals made via UPI as part of the monthly quota of free ATM transactions. After exceeding the monthly limits, the same fees will apply to ATM withdrawals made with debit cards as those made ways of UPI.
This effort shows a standardization of ATM usage based on the use of cards and digital payment options.
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Changes Will Include Daily ATM Cash Withdraw Limits
In addition to determining withdrawal limits based on the type of card something like debit cards having limits between ₹20,000 and ₹40,000 for basic debit card users and limits of up to ₹1,00,000 for prepaid, or premium debit cards, there are also restrictions on daily ATM cash withdrawal as well as other types of withdrawal based on a bank’s particular rules that may limit limits for certain users (from your bank).
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Why These Changes are Occurring?
A number of fundamental changes have been made by banks pertaining to their banking policies, which are driving these changes:
- Increased costs associated with operating ATMs and associated interchange fees;
- A major increase in the amount of digital/online payment transactions being made in total;
- A need for banks and/or government regulators to better control and monitor fraud committed against customers of the banks
As a result of the above changes, banks are looking to modify their ATM withdrawal policies in order to comply with current changes in consumer behavior and trends as well as comply with current regulatory standards.
What Should Customers Do?
With the impending changes to ATM transactions, customers need to:
- Track the number of ATM cash withdrawals made each month;
- Use their bank’s ATM in order to avoid additional charges;
- Be aware of how they are using their ATM withdrawals made via UPI;
- Check their bank’s website for the most current ATM withdrawal limits and fees.
- Planning ahead for making ATM transactions will allow consumers to avoid additional charges they may incur.
Bottom Line
Starting on April 1, 2026, customers in India will find that the rules regarding their use of ATMs will be more restrictive and may cost more if they exceed the allowed limit of cash that can be withdrawn from an ATM. This is intended to make banking operations easier for the banks, but it will also mean that customers need to be more conscious of their transaction habits to avoid incurring excessive fees when withdrawing cash from ATMs.
