New ATM rules from April 1: HDFC Bank, PNB, Bandhan Bank revise withdrawal limits, charges — What’s changing

New ATM rules from April 1: India’s banking system will see a fresh set of ATM rule changes from April 1, 2026, as lenders tighten cash usage norms while pushing digital adoption. Commercial banks such as HDFC Bank, Punjab National Bank and Bandhan Bank are revising withdrawal limits, transaction charges and even how UPI-based cash withdrawals are counted. The changes, which come into effect with the new financial year, could directly impact how often customers use ATMs, how much cash they can withdraw daily, and when charges begin to apply. Customers may need to track transactions more closely to avoid fees, especially as digital and cardless withdrawals are now being brought under stricter limits.

What is changing from April 1?

The biggest shift is in how banks are redefining “free” ATM usage. Earlier, some transactions - especially UPI-based cardless withdrawals were treated separately. Now, banks are moving towards a unified system where most withdrawals count within the same monthly limit.

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At the same time, withdrawal caps on debit cards are being revised, and penalties for exceeding free limits remain firmly in place. The broader aim appears to be reducing high cash dependency while improving fraud control and transaction monitoring.

HDFC Bank: UPI ATM withdrawals now part of free limit

HDFC Bank customers will see a key behavioural change in how ATM usage is calculated.

From April 1:

• UPI-based cardless cash withdrawals will count towards monthly free transaction limits
• Once the free limit is exhausted, customers will be charged Rs 23 per transaction (plus taxes)

Currently, customers are allowed:

• 5 free transactions at HDFC Bank ATMs per month
• 3 free transactions in metro cities at other bank ATMs
• 5 free transactions in non-metro cities at other bank ATMs

This means even cardless withdrawals via UPI will now eat into this quota, making it easier to hit the limit faster.

PNB cuts daily withdrawal limits by up to 50%

Punjab National Bank has revised daily cash withdrawal limits for several debit card categories - in some cases cutting limits sharply.

Revised limits include:

• Platinum, Gold, Business debit cards: reduced from Rs 1,00,000 to Rs 50,000
• Select, Signature debit cards: reduced from Rs 1,50,000 to Rs 75,000

This marks a reduction of up to 50 per cent for certain users. The move is aimed at standardising withdrawal behaviour and limiting risk exposure linked to high-value cash transactions.

Bandhan Bank updates free transaction rules

Bandhan Bank has also revised how free ATM transactions work.

Under the new structure:

• At Bandhan Bank ATMs:
  • Free financial transactions allowed per month
  • Unlimited non-financial transactions

• 3 free transactions in metro cities
• 5 free transactions in non-metro cities

After these limits, charges will apply as per the bank’s schedule.

Metro cities include Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad.

What about UPI-based cash withdrawals?

UPI-based ATM withdrawals, enabled through interoperable cardless cash withdrawal (ICCW), are becoming more mainstream. This system allows users to:

• Scan a QR code at the ATM
• Authorise via a UPI app
• Withdraw cash without a physical card

Banks are now integrating these transactions into overall limits rather than treating them as separate - signalling that even digital access to cash will be monitored more closely.

Why banks are tightening ATM rules?

The changes reflect a broader shift in India’s banking ecosystem:

• Encouraging digital payments over cash usage
• Reducing fraud and misuse risks
• Standardising ATM usage across banks
• Managing operational costs linked to ATM networks

With UPI already dominating retail payments, banks are now aligning ATM policies with this digital-first approach.

What customers should do now?

With multiple changes coming into force, customers may need to adjust their habits:

• Track monthly ATM usage to avoid crossing free limits
• Be mindful that UPI withdrawals also count now
• Check revised daily withdrawal limits for their debit card
• Plan withdrawals to minimise extra charges