New ATM rules from April 1: Charges, limits, other key updates every bank customer must know

With the new financial year beginning April 1, 2026, banks across India are rolling out revised ATM rules that will impact withdrawal limits, transaction charges and how usage is calculated. The changes, aligned with broader regulatory guidelines, are expected to influence how customers access and manage cash.

Here's a detailed breakdown of what is changing:

Free UPI transactions limit

One of the key changes comes from HDFC Bank, which will now count UPI-based ATM cash withdrawals within the monthly free transaction limit. Earlier, these transactions were treated separately.

Under the revised structure, customers will continue to get:

• 5 free transactions at their own bank ATMs
• 3 free transactions at other bank ATMs in metro cities
• 5 free transactions in non-metro areas

However, UPI withdrawals will now be included within these limits. Once the free quota is exhausted, customers will be charged ₹23 per transaction (excluding taxes).

Additionally, HDFC Bank has introduced a timing rule ATM transactions made after 7:30 PM will be counted as the next day's transaction. On the last day of the month, such transactions will be carried forward to the next month's quota.

Withdrawal limits revised for select debit cards

Punjab National Bank (PNB) has updated daily withdrawal limits for certain debit cards. From April 1, the maximum daily withdrawal for select variants has been reduced from ₹1 lakh to ₹50,000.

For some other variants, withdrawal limits may range between ₹50,000 and ₹75,000, depending on the card category.

Transaction rules update

Customers will be allowed 5 free financial transactions per month at Bandhan Bank ATMs.  At other bank ATMs, 3 free transactions in metro cities and 5 free transactions in non-metro areas will be allowed. 

Unlike earlier structures, both financial and non-financial transactions (such as balance enquiry) will be counted toward the free limit at other bank ATMs.

Once the limit is exceeded:

• Financial transactions: ₹23 per transaction
• Non-financial transactions: ₹10 per transaction
• Failed transactions due to insufficient balance: ₹25 penalty

 ATM charges increased across the system

Beyond individual bank changes, there is a broader revision in ATM charges across the banking system.

• Charges after free limit increased from ₹21 to ₹23 per transaction
• Interchange fee (paid between banks):  Financial transactions: ₹19 Non-financial transactions: ₹7

What this means for customers

The changes may appear incremental, but they can impact regular banking habits.

• Frequent withdrawals will now become slightly more expensive
• UPI-based ATM withdrawals will no longer be "extra" free usage
• Customers may need to track usage more closely to avoid charges

Shift towards digital payments

Banks are also nudging customers toward digital alternatives such as UPI and net banking. With higher ATM usage costs and expanded counting of transactions, many users may reduce ATM visits and rely more on digital modes.

India currently has over 2.5 lakh ATMs, but usage trends have gradually shifted as digital payments grow. 

How to avoid extra ATM charges

• Use their own bank's ATMs wherever possible
• Plan withdrawals to reduce frequency
• Track monthly transaction limits through banking apps
• Use digital payments for routine transactions