New Banking Rules – Starting May 1, 2025, the banking experience for millions of customers in India is about to change. The Reserve Bank of India (RBI), in coordination with several public and private banks, is rolling out new rules that will affect how you withdraw cash, transfer money, use lockers, and maintain your savings account. These updates are being introduced to enhance digital banking, improve security, and bring more transparency in services.
Here’s a simple breakdown of the 5 key changes coming your way and how they’ll impact your everyday banking routine.
1. New Rules for ATM Withdrawals
One of the biggest changes from May 1 is the update in ATM withdrawal limits and charges. If you’re someone who relies heavily on ATM withdrawals, you might want to take note of this.
Earlier, you could make five free ATM withdrawals in a month. Now, that number has been cut down to three when using non-home branch ATMs. After that, every extra withdrawal will cost you twenty-one rupees, up from the earlier twenty. Withdrawals from home branch ATMs will remain the same in most banks. However, customers with premium accounts may still enjoy up to five free transactions.
So what does this mean for you? If you withdraw cash often, especially from non-home branches, you’ll have to plan your transactions wisely to avoid unnecessary charges.
2. Changes in UPI Transaction Limits and Charges
UPI has become the go-to method for most people when it comes to sending and receiving money. From paying at local stores to transferring funds to friends, UPI is everywhere. But from May 1, there are a few changes you should be aware of.
A new upper limit of one lakh rupees per day will be applicable for regular users. For small-value transactions, UPI Lite is being encouraged. This allows payments under two hundred rupees without needing a PIN.
For merchant payments above two thousand rupees, a small fee of around one point one percent may now be applicable. This won’t affect peer-to-peer transactions, so sending money to your friend or family remains free.
These changes are aimed at better regulating the growing number of UPI transactions and reducing pressure on payment servers. It’s important to stay aware of these limits, especially if you run a small business or use UPI frequently for larger purchases.
3. Bank Locker Agreement – Last Date to Sign is May 1
If you have a bank locker, this change is crucial. RBI has asked all banks to get a revised locker agreement signed by customers to improve security and accountability.
May 1 is the final deadline to sign this updated agreement. If you don’t, your locker access might be blocked or you could face penalties. So make sure to visit your bank, carry a valid ID, and sign the new agreement.
Also, banks are now required to maintain a digital log of locker visits. They’ll only be liable for losses caused due to their negligence. So this change puts more responsibility on customers to follow procedures and keep their locker details updated.
4. NEFT and RTGS Timings Updated
The good news is that digital money transfers are getting more flexible. NEFT is now available twenty-four seven, even on weekends and holidays. This means you can send money anytime without worrying about banking hours.
RTGS, which is used for high-value transactions, will now be available till eleven thirty at night. Earlier, it was only available till six in the evening. These changes will be a big help for businesses and individuals who often make last-minute transfers.
IMPS and UPI were already working round the clock, so this update just adds more convenience to the digital banking experience.
5. Monthly Average Balance (MAB) Requirement Changes
Several private sector banks are updating their monthly average balance rules. For savings accounts in urban areas, the required MAB is now five thousand rupees instead of three thousand.
In semi-urban and rural areas, the requirement remains the same at two thousand. If you fail to maintain this balance, penalties will apply. These penalties can range from one hundred to three hundred rupees per month, depending on the bank.
However, digital-only accounts and student accounts are usually exempt from these rules. So if you use a zero-balance digital savings account, you won’t be affected by this change.
What These Changes Mean for You
These new rules are part of a larger effort to modernize banking in India. They aim to boost digital transactions, strengthen customer safety, and streamline banking operations. But they also mean you need to be more alert and organized.
Here are some things you can do to stay ahead:
- Keep an eye on your ATM usage so you don’t get hit with unnecessary fees
- Monitor your UPI payments and be aware of the new charges for merchant transactions
- Make sure your locker agreement is updated before the deadline
- Use the extended NEFT and RTGS hours for convenient transfers
- Maintain your average monthly balance to avoid penalties
While these changes might feel like a lot at once, they are mostly aimed at making banking more efficient and secure. You’ll need to adjust a few habits, but once you’re aware of the new rules, managing your finances will become easier and more predictable.
Banks will continue to notify you through SMS, emails, and official apps. Make sure you read those updates and reach out to customer support if you’re unsure about how a change applies to your specific account.
Stay informed, stay prepared, and banking will continue to work smoothly for you.
