New Banking Rules – The Indian banking landscape is set to undergo a significant transformation starting June 1, 2025. The Reserve Bank of India (RBI) and other financial regulators have announced a series of policy changes that will directly impact your bank account, ATM withdrawals, digital transactions, and even how you manage your monthly savings. These changes aim to enhance transparency, reduce fraud, and bring more efficiency into the financial system—but they come with certain implications for customers.
Let’s break down the five major banking rule changes that every account holder must be aware of before June kicks in.
1. New Daily Withdrawal Limits on ATMs
Starting June 1, most private and public sector banks will implement a new rule that reduces daily ATM withdrawal limits. This is intended to curb cash misuse and encourage digital transactions.
Key Details:
- New daily ATM withdrawal limit: ₹20,000 for savings accounts
- Previous limit: ₹40,000
- Applicable to: All customers of HDFC, ICICI, SBI, Axis, and more
- Fees for excess withdrawal: ₹150 per transaction beyond limit
- Applies to: Cash withdrawals only, not POS or online spending
- Goal: Encourage UPI and NetBanking usage
- Affected users: Primarily urban and semi-urban users
2. UPI Transactions to be Charged Beyond Monthly Limit
In a surprising move, UPI payments will now come with charges for high-frequency users. The National Payments Corporation of India (NPCI) has approved service fees for non-bank UPI apps exceeding a certain number of monthly transactions.
Details of the New UPI Charges:
| Monthly UPI Transactions | Charges Applicable | Who Will Be Charged | Platforms Affected | Effective From |
|---|---|---|---|---|
| Up to 30 | No Charges | All Users | Google Pay, PhonePe | June 1, 2025 |
| 31 to 50 | ₹1.25 per transaction | Individual Users | Google Pay, Paytm | June 1, 2025 |
| Above 50 | ₹2.00 per transaction | Businesses & Individuals | All UPI apps | June 1, 2025 |
Note: Bank-based UPI apps like BHIM remain free for personal users, unless they cross usage limits.
3. Minimum Balance Requirement Increased
Banks are updating their minimum average balance (MAB) requirement, especially in urban branches.
Key Points:
- New MAB: ₹5,000 for urban accounts
- Earlier MAB: ₹3,000
- Non-maintenance penalty: ₹250/month + GST
- Applicable to: HDFC, Axis, SBI, and ICICI savings accounts
- Senior citizens and PMJDY accounts: Exempted
Customers failing to meet the revised balance may lose interest benefits or face account restrictions.
4. Digital KYC Mandatory for All Account Holders
From June 1, banks will mandate Digital KYC updates for all existing accounts. Those who haven’t completed digital verification may face service interruptions.
Implementation Highlights:
- Deadline: June 30, 2025
- Process: Aadhaar-based OTP verification or video KYC
- Failure to comply: Freezing of account transactions
- Affected services: NetBanking, debit card use, cheque clearing
- Targeted at: All customers who opened accounts before 2020
Customers can update their KYC via NetBanking, Mobile Banking, or by visiting the nearest branch.
5. Auto-Debit Rules Tightened by RBI
The RBI has revised auto-debit regulations for credit card bills, OTT renewals, loan EMIs, and utility payments.
What’s Changing:
- Mandatory OTP-based authentication for transactions above ₹5,000
- One-time e-mandate re-registration for all users by June 10
- Notifications: Banks will now send SMS/email before auto-debit
- Failed mandates due to no consent: ₹250 penalty per failure
This aims to improve transparency and protect customers from unauthorized debits.
Sample Chart – Auto-Debit Changes Overview about New Banking Rules
| Service Type | New Rule | Previous Rule | Penalty (if failed) | Effective Date |
|---|---|---|---|---|
| Credit Card Payment | OTP for above ₹5,000 | Auto-debit allowed | ₹250 | June 1, 2025 |
| OTT Subscription | Consent needed via SMS | Auto-renewal allowed | ₹100 | June 1, 2025 |
| EMI Payments | Fresh e-mandate needed | Bank mandate valid | ₹250 | June 10, 2025 |
| Insurance Premium | Pre-debit notification | Direct auto-debit | ₹250 | June 1, 2025 |
Important Contacts for Bank Queries
| Bank Name | Customer Care Number | Email Support | Website Link |
|---|---|---|---|
| SBI | 1800 1234 | [email protected] | www.onlinesbi.sbi |
| ICICI Bank | 1860 120 7777 | [email protected] | www.icicibank.com |
| HDFC Bank | 1800 1600 6767 | [email protected] | www.hdfcbank.com |
| Axis Bank | 1860 419 5555 | [email protected] | www.axisbank.com |
| Kotak Mahindra | 1860 266 2666 | [email protected] | www.kotak.com |
FAQs about New Banking Rules
Q1. Will the ATM withdrawal limit apply to current accounts too?
No. The new withdrawal limit primarily applies to savings account holders.
Q2. What if I don’t complete Digital KYC before the deadline?
Your account may be frozen, and online services will be suspended until KYC is updated.
Q3. Are UPI charges applicable to all transactions?
No. Only high-frequency users on private UPI apps will be charged, and only after 30 monthly transactions.
Q4. Is there a waiver on minimum balance rules for students or pensioners?
Yes. Banks have exempted senior citizens, students, and Jan Dhan accounts from MAB penalties.
Q5. Will EMI debits stop if e-mandate is not renewed?
Yes. You must complete e-mandate re-registration or risk missed EMI payments and penalties.
The upcoming banking rules starting June 1, 2025, are a significant shift in how we use and manage bank accounts in India. While they aim to boost digital efficiency and security, they also bring new compliance steps for account holders. Stay proactive—update your KYC, check your UPI usage, and ensure you have enough balance to avoid penalties. These small steps can help you avoid any inconvenience and keep your banking experience smooth and secure.
What are the key changes in banking rules affecting your bank account?
Increased fees, reduced services, new policies, stricter regulations, and privacy concerns.
