From April 1, 2026, several banks in India are revising their ATM withdrawal rules, affecting UPI-based cash withdrawals, daily withdrawal limits, and the number of free transactions allowed. The changes aim to align UPI transactions with traditional ATM usage, curb cost disparities, and encourage digital payment adoption.
HDFC: UPI Withdrawals Count as ATM Txns
UPI Withdrawals Now Counted as ATM Transactions: HDFC Bank announced that UPI cash withdrawals at its ATMs will now be counted within the monthly free transaction quota. Previously, cardless UPI cash withdrawals were often outside the free limit, offering an extra benefit to customers. From April 1, any UPI withdrawal beyond the free quota will attract a fee of ₹23 plus taxes.
Experts note that this rule effectively eliminates the cost difference between digital and card-based cash withdrawals. “Customers who frequently use UPI cash withdrawals may reach their free limit faster and incur charges earlier in the month,” a banking analyst said.
PNB Slashes Daily Withdrawal Caps
Daily Withdrawal Limits Reduced: Punjab National Bank (PNB) has revised daily ATM withdrawal limits for multiple debit card variants. For most cards, the daily limit drops from ₹1,00,000 to ₹50,000, while higher-tier cards’ limits fall from ₹1,50,000 to ₹75,000 per day.
This change means customers planning large cash withdrawals will need to either split transactions across multiple days, visit bank branches, or rely more on digital payments. Analysts suggest that lower withdrawal caps may gradually reduce cash dependency and encourage the use of card or UPI payments.
Bandhan Tightens Other-Bank ATM Rules
Fewer Free Transactions at Other Banks’ ATMs: Bandhan Bank has revised its free ATM usage policy, particularly for transactions at other banks’ machines. Customers will now get:
Bandhan ATMs: Up to five free financial transactions per month; non-financial usage such as balance checks remains unlimited.
Other bank ATMs: Three free transactions in metro cities (financial + non-financial combined) and five in non-metros.
Balance Checks Now Count vs Quota
Once the free limit is exceeded, financial transactions will attract ₹23, non-financial ₹10, and failed transactions due to insufficient balance ₹25. Metro cities include New Delhi, Mumbai, Kolkata, Chennai, Bengaluru, and Hyderabad.
This change affects routine activities like balance checks or mini statements at non-home bank ATMs, which now count toward the free quota, potentially increasing transaction costs.
How Customers Can Minimise Charges:
- Track monthly transactions – include UPI cash withdrawals in the tally.
- Prefer home bank ATMs for balance checks and mini statements.
- Plan large withdrawals in advance due to lower daily limits.
- Shift to digital payments wherever possible to reduce cash dependence.
Cashless Economy Push Accelerates
Market and Consumer Impact: Analysts say the revised rules will particularly affect frequent ATM users in metro cities relying heavily on cardless withdrawals. Banks’ steps to align UPI withdrawals with traditional ATM transactions reflect a broader push toward cost recovery and operational efficiency.
Some experts predict these measures may encourage a gradual shift toward cashless payments, in line with government objectives to expand digital financial inclusion. Consumers are advised to plan cash needs carefully and monitor monthly usage to avoid unexpected fees.
The new regulations, effective April 1, 2026, represent a significant shift in ATM withdrawal norms, impacting daily cash access, free transaction limits, and UPI withdrawals. Customers should review their bank policies, track transactions, and consider digital alternatives to minimise additional charges.
About the author – Rehan Khan is a law student and legal journalist with a keen interest in cybercrime, digital fraud, and emerging technology laws. He writes on the intersection of law, cybersecurity, and online safety, focusing on developments that impact individuals and institutions in India.
