With India going into the last week of April, the banking system of the country is all set to embrace multiple changes starting from May 1, 2025. Social media on Friday started to buzz after multiple claims suggested that UPI users will now be charged for payment of more than Rs 2000. After the Finance Ministry and the RBI came under the scanner, the government had to issue a statement. Centre refuted claims of imposing GST on UPI transactions exceeding Rs 2,000, clarifying that no such proposal exists. GST applies to charges like Merchant Discount Rate (MDR), which is currently waived for UPI transactions. Nevertheless, the question arises, what changes in the Indian banking system will come into effect from May 1? Below is what you need to know-
1) ATM Withdrawal Fee
In March 2025, the RBI announced an ATM withdrawal fee. RBI has announced that it has increased the maximum fee on ATM withdrawals. IT means, banks can charge customers for ATM cash withdrawals Rs 23. This new fee, which will come into effect on May 1, 2025, replaces the previous cap of Rs 21. The RBI had earlier approved an increase in the ATM interchange fee that banks pay each other, raising it to Rs 19.
As per reports, free ATM withdrawals has reduced from 5 to 3 for non-home branch usage. Another change is Rs 23 per transaction chargeable (previously Rs 21). Home branch ATM transactions remain unchanged for most banks. Premium account holders may receive up to 5 free transactions.
2) UPI Limit
As per reports, the RBI is planning to regulate the growing volume of UPI transactions. In order to do this, some banks and third-party UPI providers are aligning with NPCI’s latest framework. The new guidelines reportedly suggest-
- Upper limit of Rs 1 lakh per day for standard users
- UPI Lite introduced for small-value transactions under Rs 200
- No charges for peer-to-peer (P2P) transactions
3) Minimum Balance Requirements
As per reports, private banks are likely to modify the Monthly Average Balance requirements for savings accounts.
As per sendhwass report, Monthly Average Balance for urban branches revised to Rs 5,000 (from Rs 3,000)
Rural and semi-urban branches continue with Rs 2,000
Penalties for non-maintenance will now start from Rs 100 per month
Digital-only accounts may be exempt from MAB requirements