What Are the New Rules for Cash Withdrawal?

Banks in India have updated their cash-withdrawal rules in 2026, especially for ATM transactions, UPI-based withdrawals, and basic savings accounts. The biggest change is that some banks now count UPI cash withdrawals within the same free monthly limit as debit-card ATM withdrawals. Customers should check their bank’s latest rules before withdrawing money because limits and charges differ from bank to bank.

UPI Cash Withdrawals Count Toward Limits

From April 1, 2026, HDFC Bank started counting UPI-based cardless cash withdrawals at ATMs within the customer’s regular monthly free-transaction limit. Earlier, these UPI withdrawals were treated separately from normal ATM withdrawals. Now, if a customer uses UPI to withdraw cash, it uses one of their available free transactions.

For HDFC Bank customers, the free limit is five transactions at HDFC Bank ATMs, three transactions at other banks’ ATMs in metro cities, and five transactions at other banks’ ATMs in non-metro areas. After crossing the free limit, each extra withdrawal costs ₹23 plus applicable taxes. This means customers who often use UPI cash withdrawal should keep track of how many transactions they have already used in a month.

Daily Withdrawal Limits Have Changed

Some banks have reduced the maximum amount a customer can withdraw from an ATM in one day. Punjab National Bank, for example, lowered daily ATM cash-withdrawal limits for several debit-card categories. Certain cards that earlier allowed withdrawals of up to ₹1 lakh per day now have a limit of ₹50,000 per day.

Some premium debit cards have also seen changes. Cards that earlier permitted ₹1.5 lakh in daily withdrawals may now have a limit of ₹75,000 per day. These limits depend on the type of debit card, so customers should check their card details in the bank’s mobile app, net-banking account, or official bank communication before planning a large withdrawal.

SBI Rules for Basic Savings Accounts

State Bank of India changed its cash-withdrawal rules for Basic Savings Bank Deposit, or BSBD, accounts from October 1, 2026. BSBD account holders can still make four free cash withdrawals every month. However, the bank has changed the way it counts these withdrawals across different services.

Under the new rule, cash withdrawals made through SBI ATMs, other banks’ ATMs, SBI branches, and the Aadhaar Enabled Payment System, or AePS, all count toward the same four free withdrawals. This is an important change because customers may use more than one method to take out cash. For example, if a customer makes two ATM withdrawals and two AePS withdrawals, they have already used all four free transactions for that month.

After the fourth free withdrawal, SBI charges ₹15 plus GST for every additional cash withdrawal. This charge applies to withdrawals from branches, ATMs, and AePS. Customers should remember that this rule applies to cash withdrawals, not to digital money transfers.

Digital Transfers Are Not Affected

The new SBI rules do not apply to digital transfers such as UPI, IMPS, NEFT, and RTGS. Customers can still use these services to send money without using their monthly cash-withdrawal quota. This makes digital transfers a better option for paying bills, sending money to family members, or making regular payments.

For example, instead of withdrawing ₹5,000 in cash to pay someone, a customer can send the amount through UPI or IMPS. This avoids using a free cash-withdrawal transaction and may help the customer avoid extra charges later in the month. Digital payments also create a clear record of the transaction, which can be useful for budgeting and tracking expenses.

Bandhan Bank ATM Rules

Bandhan Bank has also revised its ATM transaction rules. Customers get five free financial transactions every month at Bandhan Bank ATMs. At other banks’ ATMs, customers get three free transactions per month in metro cities and five free transactions per month in non-metro areas.

At other banks’ ATMs, both financial and non-financial transactions count toward the free limit. Financial transactions include cash withdrawals, while non-financial transactions include balance checks and mini statements. After the free limit is crossed, financial transactions cost ₹23 each, non-financial transactions cost ₹10 each, and a failed withdrawal due to insufficient balance can lead to a ₹25 penalty.

What Customers Should Do Now

Customers should first check whether their bank counts UPI cash withdrawals within the regular ATM free limit. This is especially important for people who use UPI withdrawals often, because a few extra transactions can lead to charges.

Customers should also track their monthly ATM usage and avoid unnecessary balance checks at other banks’ ATMs. Using their own bank’s ATM, planning withdrawals in advance, and using UPI or IMPS for payments can help them stay within the free limit.

Before withdrawing a large amount, customers should confirm the daily limit linked to their debit card. Banks may have different limits for regular, premium, and business debit cards. Checking the bank app or contacting customer support can prevent a failed transaction or an unexpected charge.

Finally, customers should read their bank’s updated fee schedule. The rules are not the same for every bank or every account type. Basic savings account holders, in particular, should understand how ATM, branch, and AePS withdrawals are counted before making frequent cash withdrawals.

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