RBI Savings Account Guidelines 2025: Key Updates on ATM Fees, KYC & Cheque Clearance

The Reserve Bank of India (RBI) has made various changes in the regulations of savings accounts in 2025, mainly looking at areas like financial inclusion, digitalization and quicker processes such as cheque clearance. Although there is not one uniform set of rules that comes into effect from October 1, these changes in BSBDA, ATM charges, KYC simplifications and quicker cheque processing will result in cost reduction, transparency increase and, therefore, accessibility to banking for millions of Indians.

Key Points for RBI Savings Account Guidelines 2025:

1. BSBDA Digital Expansion: To attract more customers to the bank, all digital transactions (UPI, NEFT, RTGS, IMPS) for Basic Savings Bank Deposit Accounts will be free of charge and unlimited starting March 31, 2026.

2. ATM Charges Update: 3 free transactions in metro areas and 5 in non-metro areas at other people’s ATMs plus ₹23 fee for each additional withdrawal from May 1, 2025.

3. Minimum Balance Flexibility: Banks are allowed to set the requirements independently and this will be made clear to customers; there is no single penalty threshold—some public banks like SBI just cancel the fees altogether.

4. KYC Simplification: Low-risk customers will be given a year (up to June 30, 2026) to update their KYC records; self-declaration is allowed through digital channels, according to a June 12, 2025 circular.

5. Faster Cheque Clearance: Processing continues from October 4, 2025—money in hands in a few hours as opposed to 1-2 days; Phase 1 automatically approves unconfirmed cheques by 7 PM.

6. Overall Impact: The changes applied through the reforms are going to lower the cost of banking, increase market access for rural areas, and decrease settlement time, thus, benefiting both savers and businesses.

1. Minimum Balance Rules Enhanced for Clarity

The RBI keeps promoting the principle of transparency in minimum balance policies, thus giving banks some freedom but at the same time requiring the banks that they communicate very clearly to the customers not to have any surprises. As per the current instructions (to be further strengthened in August 2025), the banks have to tell the customers beforehand what the requirements are and also make sure the penalties are fair and not too high. 

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Public sector banks like SBI, PNB, and Canara Bank do not levy penalties for non-maintenance in savings accounts, while private banks may charge based on location (e.g., ₹3,000–₹5,000 AMB in metros). This setup helps customers manage finances without arbitrary fees, with no new universal threshold introduced in 2025.

2. ATM Transaction Charges Revised for Affordability

To balance operational costs with customer convenience, RBI updated ATM rules effective May 1, 2025:

• Customers get 3 free ATM transactions (financial + non-financial) per month at other bank ATMs in metro areas; 5 free in non-metro areas.

• Beyond the limit, a maximum fee of ₹23 per financial transaction (e.g., cash withdrawal) and ₹11 for non-financial (e.g., balance inquiry), plus taxes, up from ₹21/₹10 previously.

These changes apply to Cash Recycler Machines (CRMs) too, except cash deposits. Banks like HDFC and IndusInd have notified customers, encouraging UPI/digital alternatives to minimize fees and promote cashless banking.

3. Penalty Structure Remains Bank-Specific

RBI’s 2014 guidelines (unchanged in 2025) prohibit negative balances due to penalties and require prior notices via SMS/email. Penalties vary by bank, e.g., up to 7–10% of shortfall in private banks, but apply only after notification. No new rule ties penalties to a ₹500 threshold over three months; instead, focus is on fairness. Customers in Basic Savings Bank Deposit Accounts (BSBDAs) face zero minimum balance requirements, ensuring no penalties for low-income users.

4. Expanded Digital Banking for BSBDA Holders

In a major push for inclusion, RBI’s draft directions (announced October 1, 2025) expand free services for Basic Savings Bank Deposit Accounts (BSBDAs) – zero-balance accounts for underserved segments. Effective March 31, 2026:

• Unlimited free digital transactions via UPI, NEFT, RTGS, IMPS, and PoS (excluding ATMs).

• Free RuPay ATM/debit card and basic cheque book on request.

This upgrade reduces branch dependency in rural areas, aligning with PMJDY goals. Existing no-frills accounts automatically qualify as BSBDA.

5. KYC Reverification Streamlined for Ease

RBI’s June 12, 2025 circular simplifies periodic KYC updates to address high pendency in DBT/PMJDY-linked accounts:

• Customers classified as low-risk are provided a grace period of one year (till June 30, 2026) before their services are discontinued, and they can carry on with their transactions throughout this period.

• Self-declaration can be done through email, the app, ATM, or branch; V-CIP or Aadhaar OTP for verification—there are no compulsory face-to-face visits.

• Banks must send three reminders and run awareness camps.

This replaces rigid cycles (e.g., 2–10 years based on risk), prioritizing inclusion over strict timelines. No shift to a uniform 3-year cycle.

6. Cheque Clearance System Accelerated

From October 4, 2025, RBI’s Continuous Clearing and Settlement in CTS replaces batch processing, slashing timelines from 1–2 days to hours:

• Phase 1 (Oct 4, 2025–Jan 2, 2026): Cheques deposited 10 AM – 4 PM scanned continuously; hourly settlements from 11 AM. Banks confirm by 7 PM or auto-approve.

• Phase 2 (Jan 3, 2026 onward): 3-hour confirmation window per batch (e.g., 10 – 11 AM cheques by 2 PM).

An October 3 trial ensured smooth rollout. Funds release within 1 hour post-settlement, benefiting businesses and individuals; banks must educate customers.

Stay Informed to Avoid Surprises

RBI’s 2025 savings account updates foster a more inclusive, efficient banking ecosystem without a blanket October 1 rollout. From free BSBDA digital tools and capped ATM fees to simplified KYC and rapid cheque clearance, these changes cut costs and delays for everyday users. Review your bank’s policy on rbi.org.in or via app alerts to leverage benefits, stay informed to avoid surprises in minimum balance or transactions.

FAQs on RBI Savings Account Guidelines 2025

Q1: Why did the RBI introduce the new savings account guidelines for 2025?

Ans: The Reserve Bank of India introduced updated savings account guidelines, focusing on financial inclusion, digital banking and faster cheque processing.

Q2: What are the key changes for Basic Savings Bank Deposit Accounts (BSBDA)?

Ans: From March 31, 2026, BSBDA holders will enjoy unlimited free digital transactions via UPI, NEFT, RTGS, and IMPS, along with free RuPay ATM/debit cards and basic cheque books.

Q3: How have ATM transaction charges been revised under RBI 2025 guidelines?

Ans: Customers get 3 free ATM withdrawals in metro areas and 5 in non-metro areas at other banks’ ATMs; additional transactions are charged ₹23 per withdrawal from May 1, 2025.

Q4: How has KYC verification been simplified in 2025?

Ans: Low-risk customers have one year (till June 30, 2026) to update KYC records. Self-declaration is allowed through digital channels, reducing the need for face-to-face visits.

Q5: What improvements have been made in cheque clearance?

Ans: From October 4, 2025, RBI’s cheque clearing system allows funds to be available within hours instead of 1–2 days, with Phase 1 auto-approving unconfirmed cheques by 7 PM and Phase 2 reducing confirmation to 3 hours per batch.