New Banking and UPI Regulations in India: What You Need to Know

As of February 1, 2025, several key changes in banking and UPI (Unified Payments Interface) regulations have been implemented in India. These updates impact ATM withdrawals, UPI transactions, and digital banking security. Here’s everything you need to know:

1. ATM Withdrawal Limits and Charges
Free withdrawals are now limited to three per month for savings account holders at non-home bank ATMs.
After the free limit, ₹21 per transaction will be charged.
Customers using premium bank accounts may have higher withdrawal limits.
2. Revised UPI Transaction Rules
Blocking of suspicious UPI IDs: If a UPI ID is flagged multiple times for fraud, the system may automatically restrict transactions.
UPI transaction limits remain ₹1 lakh per day for most users, but some merchants may get higher limits based on RBI guidelines.
Mandatory OTP verification for transactions above ₹5,000 to improve security.
3. Digital Banking Security Enhancements
Banks must implement AI-based fraud detection systems to identify and prevent fraudulent transactions.
Stronger KYC verification is now required for new UPI registrations to prevent identity fraud.
RBI has instructed banks to introduce multi-factor authentication for large digital transactions.
Why These Changes Matter?
These updates are aimed at enhancing security, reducing fraud, and improving digital banking efficiency in India. Customers are advised to stay updated on their bank’s official guidelines to avoid unnecessary transaction failures or extra charges.