India’s banking sector is set to introduce important changes related to ATM cash withdrawals starting April 1, 2026. Major banks including HDFC Bank and Punjab National Bank (PNB) have announced updates to their ATM and cash withdrawal rules that could directly affect customers’ expenses and daily banking habits.
The new rules will impact how ATM transactions are counted, the number of free withdrawals available, and the maximum amount customers can withdraw daily. These changes aim to bring more transparency to ATM usage and encourage the growing adoption of digital payments across the country.
Changes in ATM Withdrawal Rules from April 1
From April 1, several new policies will come into effect for ATM users. One of the biggest changes is related to cardless cash withdrawals using UPI at ATMs.
Previously, withdrawals made using UPI at ATMs were treated separately from normal debit card transactions. However, under the new rule, these UPI-based withdrawals will now be counted within the monthly free ATM transaction limit.
This means that customers who frequently use cardless cash withdrawal facilities may reach their free transaction limit faster than before.
Banks say the move will standardize all ATM transactions—whether made through debit cards or UPI—and create a uniform policy for customers.
HDFC Bank: UPI Cash Withdrawals Now Included in Free Limit
HDFC Bank customers will see a significant change in how ATM withdrawals are calculated.
Starting April 1, UPI cash withdrawals from ATMs will be counted in the monthly free transaction limit for savings and salary account holders.
Customers are typically allowed five free ATM transactions per month at their own bank’s ATM. Once this limit is exceeded, the bank may charge ₹23 per transaction plus applicable GST.
Earlier, UPI-based ATM withdrawals were not included in this free limit, allowing customers more flexibility. With the new rule, both card and UPI withdrawals will be counted together.
This means customers will need to track their ATM usage more carefully to avoid additional charges.
PNB Reduces Daily Cash Withdrawal Limit
Punjab National Bank has introduced another important change related to security and fraud prevention.
PNB has reduced the daily ATM cash withdrawal limit on certain debit cards. Cards that previously allowed withdrawals of up to ₹1 lakh per day will now have limits reduced to ₹50,000 or ₹75,000, depending on the card type.
According to the bank, the change is aimed at minimizing potential losses in case of card theft or fraud. Lower limits ensure that large sums cannot be withdrawn in a single unauthorized transaction.
Free ATM Transaction Limits Explained
Under existing banking rules:
- Customers get 5 free transactions per month at their own bank’s ATM
- At other banks’ ATMs, customers get
- 3 free transactions in metro cities
- 5 free transactions in non-metro cities
After exceeding these limits, banks can charge up to ₹23 per transaction, excluding taxes.
Why Banks Are Making These Changes
Banks say these policy changes are designed to:
- Maintain transparency between ATM and UPI transactions
- Reduce operational costs
- Improve security against fraud
- Encourage customers to use digital payment systems
With digital platforms like UPI becoming increasingly popular in India, banks want customers to rely less on cash withdrawals and more on direct digital payments.
How Customers Can Avoid Extra ATM Charges
Customers can follow a few simple steps to avoid unnecessary ATM fees:
Use digital payments: Pay through UPI or online banking instead of withdrawing small amounts of cash.
Withdraw cash in fewer transactions: Instead of multiple small withdrawals, take out a larger amount once or twice a month.
Monitor transaction limits: Check your bank app or net banking dashboard to track your monthly ATM usage.
By planning withdrawals carefully, customers can avoid additional charges and manage their finances more efficiently.
