Indian banks have updated ATM rules to reflect the growing adoption of UPI-enabled cardless cash withdrawals, while revising transaction limits and fee structures that took effect on April 1, 2026.
Several Indian banks revised their ATM usage policies on April 1, 2026, introducing changes to UPI-based cash withdrawals, daily withdrawal limits, and free ATM transaction quotas as the country’s cardless cash withdrawal ecosystem continues to expand through the Unified Payments Interface (UPI).
The changes came as banks continued integrating the National Payments Corporation of India’s (NPCI) Interoperable Cardless Cash Withdrawal (ICCW) framework, commonly known as UPI-ATM, while updating fee structures and transaction limits.
UPI-ATM allows customers to withdraw cash without using a physical debit card. Instead, users select the “UPI Cash Withdrawal” option on a participating ATM, enter the withdrawal amount, scan the QR code displayed on the screen using a compatible UPI application, authenticate the transaction with their UPI PIN, and receive cash directly from the machine.
Developed by NPCI with the support of the Reserve Bank of India (RBI), the facility works across participating banks and UPI applications, including BHIM, Google Pay, PhonePe, and Paytm, subject to support from the customer’s bank and the ATM operator. NPCI has prescribed a maximum withdrawal limit of ₹10,000 per transaction under the ICCW framework, although individual banks may impose lower limits.
The cardless system also offers enhanced security by reducing the risk of card skimming and card cloning, since customers no longer insert their debit cards into ATM machines. Transactions are authenticated using the customer’s existing UPI PIN through their mobile device.
Among the policy changes implemented in April, HDFC Bank began counting UPI-based ATM cash withdrawals as part of a customer’s monthly free ATM transaction quota. Once the free limit is exhausted, customers are charged ₹23 per withdrawal, plus applicable taxes. The revision aligned UPI cash withdrawals with conventional ATM transactions for fee calculations.
Punjab National Bank (PNB) reduced daily ATM withdrawal limits for several debit card variants. For many customers, the daily limit was lowered from ₹1 lakh to ₹50,000, while withdrawal limits on certain premium debit cards were reduced from ₹1.5 lakh to ₹75,000 per day.
Bandhan Bank also revised its ATM transaction policy. Customers continue to receive up to five free financial transactions each month at Bandhan Bank ATMs, while non-financial services such as balance inquiries and mini statements remain unlimited.
At ATMs operated by other banks, Bandhan Bank customers now receive three free transactions per month in metro cities and five in non-metro locations. These limits include both financial and non-financial transactions. After the free quota is exhausted, customers are charged ₹23 for each financial transaction and ₹10 for each non-financial transaction. A penalty of ₹25 also applies to failed transactions resulting from insufficient account balances.
For the purpose of these rules, metro cities include New Delhi, Mumbai, Kolkata, Chennai, Bengaluru, and Hyderabad.
The RBI first announced the interoperable cardless cash withdrawal framework in 2022, and banks and ATM operators have gradually expanded the service across their networks. However, UPI-ATM is still not available at every ATM, as deployment depends on individual banks and ATM operators upgrading their infrastructure.
The revised ATM policies reflect both the growing adoption of digital banking services and banks’ efforts to align traditional ATM operations with evolving payment technologies. Customers are encouraged to monitor their monthly ATM usage, use their own bank’s ATMs whenever possible, and increasingly rely on digital payment options to minimize transaction charges.
