Banking changes from April 1:Ignoring this could cost you ₹200-800 a year

Tighter verification protocols and revised daily withdrawal caps reflect a broader shift by lenders to mitigate digital fraud

A recent post on LinkedIn flagged changes in banking rules that from April 1 could increase service costs and transaction times as lenders implement instructions from the Reserve Bank of India (RBI).

 

“The difference between a smooth banking experience and constant friction and charges… is not your bank. It’s your awareness,” said Vijay Maheshwari, founder at Stocktick Capital, on LinkedIn.

 

According to RBI guidelines and banks, safety rules will be strengthened as digital transactions surge and fraud risks rise.

 

Two-factor authentication (2FA) is already mandatory for digital transactions. This means OTP is not sufficient — it must be paired with a password, mPIN or biometric.

 

 

Banks are increasingly using risk-based authentication, which adds extra verification steps for large or unusual transactions.

 

Customer protection rules on fraud, including zero liability in certain cases, are governed by RBI’s 2017 circular.

 

This means more checks, more alerts, and occasionally delayed transactions.

 

Where costs could rise: ATM and UPI withdrawals

 

The most tangible change for customers comes from bank-level revisions to ATM usage rules, especially around UPI-based cash withdrawals.

 

RBI allows a minimum number of free ATM transactions per month (typically five at own-bank ATMs).

 

Beyond this, banks can charge up to Rs 23 plus GST per transaction.

 

From April, some banks such as HDFC have indicated that UPI-based cardless ATM withdrawals will be counted within the same free transaction limit.

 

This means frequent users of UPI cash withdrawals could hit their monthly cap faster, leading to incremental costs.

 

Estimated impact:

 

Moderate users: Rs 200–400 annually

 

Frequent users: Rs 500–800 or more

 

Lower withdrawal limits for some customers

 

Another key change is bank-specific reduction in daily ATM withdrawal limits.

 

Punjab National Bank (PNB), for instance, has revised limits on select debit cards effective April 1, 2026:

 

Some cards: Rs 1 lakh to Rs 50,000 per day

 

Premium cards: Rs 1.5 lakh to Rs 75,000 per day

 

These are not RBI-mandated caps but internal bank decisions based on risk and cost considerations.

 

Implication: Customers relying on high cash withdrawals may need to split transactions or shift to digital modes.

 

Fraud protection remains

RBI’s framework on unauthorised transactions continues to offer strong protection, but only if customers act quickly:

 

Zero liability if the bank is at fault or the issue is reported within 3 working days

 

Limited liability if reported within 4–7 days

 

Higher exposure if reporting is delayed further

 

Banks are also required to provide 24×7 reporting channels, but delays in reporting can directly translate into financial loss.

 

Why this shift is happening

The changes reflect three structural trends:

 

Rising digital transaction volumes (especially via UPI)

 

Higher fraud risks, requiring layered authentication

 

Cost pressures on banks, leading to stricter recovery of ATM usage charges

 

The result is a system that increasingly rewards informed behaviour and penalises passive usage.

 

Who should pay closest attention

 

Frequent ATM users, especially those using UPI for cash withdrawals

 

Customers of banks revising withdrawal limits (such as PNB)

 

Individuals who do not regularly monitor bank alerts or statements

 

Cash-heavy users, including small business owners and retirees

 

What you should do now

To avoid unnecessary costs and disruption:

 

Track ATM usage (including UPI withdrawals) within your monthly free limit

 

Enable all authentication layers, including biometrics

 

Monitor alerts actively and reconcile transactions regularly

 

Report suspicious transactions immediately

 

Reduce reliance on repeated small cash withdrawals; use digital transfers where possible