What Is the “Cash Limits” From the RBI?

 

When people talk about a “cash limits issue” in India with respect to the Reserve Bank of India (RBI), they’re usually referring to rules on how much cash you can withdraw or transact (from banks/ATMs) without penalties or additional charges, and recent controversies or changes around them.

These limits come from RBI directives and aim to manage currency circulation, reduce cash-dependent informal economy activity, and encourage digital transactions. They can cause concern when they change suddenly or impact everyday banking practices — particularly ATM withdrawals and bank branch cash handling.

There have been two broad categories of rules that people often confuse:

ATM cash withdrawal and fee limits

Cash transaction usage limits (for large payments) 

Let’s break them down clearly.

 1. ATM Cash Withdrawal Rules (RBI-Mandated Free Limits & Charges)

From May 1, 2025, RBI updated the rules around ATM cash withdraws and free transactions. These are current mandated minimums, not arbitrary bank decisions.

 Free ATM Transactions Per Month (Minimum RBI Rule)

RBI mandates that banks must provide the following minimum number of free ATM transactions for savings account holders:

Transaction TypeFree Limit per Month Notes Own Bank ATMs 5 free transactions Includes both withdrawals and non-financial actions (balance enquiry, mini-statement, etc.). Other Bank ATMs in Metro Cities 3 free transactions Applies to six metros: Mumbai, Delhi, Bengaluru, Chennai, Kolkata, Hyderabad. Other Bank ATMs in Non-Metro Cities 5 free transactions Applies outside those six metros. 

Once these free limits are exhausted in a month, banks can charge fees (but only up to a maximum RBI-capped amount). 

 Charges After Free Limits

Up to ₹23 per transaction (plus taxes) for additional ATM withdrawals beyond free limit. 

This charge applies regardless of whether you withdraw or do other ATM activity (balance check etc.) once the free quota is used. 

📌Important: These are minimum free transactions set by RBI. Banks CAN offer more free withdrawals, but they cannot offer fewer than mandated. 

 2. Daily / Monthly Cash Withdrawal Amount Limits

While RBI mandates free transaction counts, actual per-day cash withdrawal amounts are mostly set by banks themselves based on card type and bank policies.

For example:

Some banks limit per-day ATM withdrawals to specific amounts (₹40,000, ₹50,000, etc.) depending on card type. 

These amount limits are not direct RBI caps but bank-imposed controls for security and risk management — though RBI guides minimum number of free uses. 

So in practice, you may see different per day cash limits on debit cards — these vary by bank and card tier. 

📌 RBI does not currently enforce a unified numeric cap like “you can only withdraw ₹X per day across all banks.” That’s a bank-level operational rule, though RBI influences customer protection (e.g., free transactions, charge caps). 

3. Cash Transaction Limits (Beyond ATMs)

Separately, RBI and Income Tax rules discourage large cash payments beyond certain levels — these are to curb black money.

Some key guidelines commonly enforceable under broader banking regulations (and income-tax reporting):

✔️ Cash Payments of ₹2 lakh or more for purchases (like property/gold/cars) are not permitted in cash — these must be done via banking channels. 

✔️ Loans or gifts over ₹20,000 in cash are typically not allowed. 

✔️ Banks monitor any cash deposits/withdrawals of ₹10 lakh or more and report details to the RBI/Income Tax Dept. 

These are not “withdrawal limits” per se, but compliance and reporting requirements to prevent misuse. 

Why This Matters (The “Issue” People Talk About)

1. Unexpected Fees

Many users used to frequent or unlimited ATM withdrawals without thinking. With the free quota and fees, charges up to ₹23 can pile up. 

2. Confusion Between Bank and RBI Limits

People sometimes think RBI sets rigid “withdraw X per day” caps. In reality: RBI mandates free transaction counts and charge caps.

Banks set daily amount limits based on cards/profile (for security). 

3. Cash Usage Rules Outside ATMs

Separate cash transaction rules (like ₹2 lakh cash limit) make people nervous when making large payments in cash — even if bank account withdrawals haven’t hit a specific RBI cap. 

🗒️ Quick Reference: Current RBI Cash-Related Limits

🏧 ATM Withdrawal (Count) Limits (Minimum RBI)

Category Free Transactions Own Bank ATMs 5 ⁽per month⁾ Other Bank ATMs (Metro)3 ⁽per month⁾ Other Bank ATMs (Non-Metro)5 ⁽per month⁾ Charges after free limit Up to ₹23 per txn 

🏦 Bank-Specific Cash Limits (Examples – Vary by Bank)

Bank / Card Daily Amount Limit (Example)SBI Debit Card₹40,000 – ₹1,00,000+ (varies by card type) HDFC Bank Up to ₹2 lakh/day (varies) Other Banks Often ₹20,000 – ₹1 lakh depending on card 

📌 Note: These amounts depend on bank and card type, not a universal RBI cap.

💳 Other Cash Rules

Cash Rule Purpose Cash payments ≥ ₹2 lakh restricted Prevent high-value cash purchases Cash loans/gifts ≥ ₹20,000 not allowed Compliance/anti-black money Banks must track/report cash deposits/withdrawals ≥ ₹10 lakh RBI/Income Tax monitoring 

📌 Bottom Line

RBI’s “cash limits” are mostly about free ATM transactions and reporting/monitoring of large movement of cash, not a strict government-wide limit of daily cash allowed. 

Banks set daily amount limits on cash withdrawals for security and risk control — not RBI directly capping a single number for all. 

Recent debates arise because customers sometimes pay fees after exceeding free limits, or mix up tax rules (like ₹2 lakh payment rule) with RBI banking rules.