India Enforces Major Financial Rule Changes from October 2026 Spanning SBI ATM Limits, UPI MDR, and Deposit Norms

The start of October 2026 marks a series of regulatory transitions, operational shifts, and tax compliance updates across India's financial architecture. Ranging from revised automated teller machine (ATM) transaction allowances at the State Bank of India (SBI) to updated deposit disclosure mandates from the Reserve Bank of India (RBI) and upcoming merchant fees on digital payments, these adjustments affect personal balance sheets, corporate accounts, and daily retail payments.

SBI Revises ATM Transaction Limits and Charges

State Bank of India is adjusting cash withdrawal terms and ATM limits starting October 1, 2026:

• For Salary Package Account holders, the allowance of free transactions at other banks' ATMs and Automated Deposit and Waste Management machines (ADWMs) drops from 10 to five per month across all centres. Beyond this free threshold, transactions will incur a fee of ₹23 plus GST for financial transactions and ₹11 plus GST for non-financial transactions.
• For Basic Savings Bank Deposit (BSBD) account holders, the first four cash withdrawals per month remain free. Any subsequent withdrawal carries a levy of ₹15 plus GST.
• Under the revised guidelines, Aadhaar-enabled Payment System (AePS) cash withdrawals will now count within the four free monthly transactions for BSBD accounts, while digital payments remain free without restriction.

RBI Bulk Deposit Norms and MPC Review

The Reserve Bank of India has introduced a revamped framework governing interest rates on bulk fixed deposits (FDs) effective October 1, 2026. Scheduled commercial banks, which generally define bulk deposits starting at ₹3 crore, must maintain uniform interest rates across all branches for deposits of similar size accepted on the same day. To enforce transparency, banks must disclose their bulk deposit rates publicly on their websites every business day at 10:00 am, subject to a 10-minute grace period. Rates may still vary based on the Liquidity Coverage Ratio (LCR) classification of the funds.

The central bank’s Monetary Policy Committee (MPC) is scheduled to convene from October 5 to October 7, 2026, with its rate decision scheduled for announcement on October 7. The benchmark repo rate stands at 5.25% following the August policy review.

UPI MDR Rollout on High-Value Merchant Payments

Starting October 15, 2026, a 0.4% Merchant Discount Rate (MDR) is slated to take effect on specified person-to-merchant (P2M) Unified Payments Interface (UPI) transactions exceeding ₹2,000.

Key exemptions apply to the new payments structure:

• Person-to-person (P2P) transfers will remain entirely free of charge.
• Payments up to ₹2,000, along with merchants covered under the government’s zero-MDR framework for small traders, remain exempt, leaving approximately 96% of standard retail transactions unaffected.
• The framework has been challenged in the Supreme Court of India, which declined an interim stay while seeking formal responses from the Union Government, the RBI, and the National Payments Corporation of India (NPCI).

Tax Audit and ITR Filing Extensions

The Central Board of Direct Taxes (CBDT) has granted relief to businesses, professionals, and corporate taxpayers covered under statutory audit provisions for Assessment Year 2026–27:

• The statutory deadline for furnishing tax audit reports under Section 44AB has been extended by 21 days, moving from September 30 to October 21, 2026.
• The corresponding Income Tax Return (ITR) submission deadline for covered audit cases has been extended from October 31 to November 21, 2026.
• Compliance timelines under Section 92E for transfer pricing cases remain unchanged, keeping the Form 3CEB deadline at October 31, 2026, and the related ITR deadline at November 30, 2026.
• Separately, effective October 1, resident individuals and Hindu Undivided Families (HUFs) purchasing real estate from Non-Resident Indians (NRIs) will no longer need a Tax Deduction and Collection Account Number (TAN), allowing them to deduct and remit TDS directly using their PAN.

Mandatory LPG e-KYC and NPS Charges

For household budgets, domestic cooking gas consumers must complete biometric Aadhaar authentication (e-KYC) by October 1, 2026, to retain eligibility for subsidised 14.2 kg LPG refills at regulated retail selling prices. Verification can be finalized via oil marketing company mobile applications paired with Aadhaar FaceRD, at distributor showrooms, or directly through delivery personnel.

Additionally, the Pension Fund Regulatory and Development Authority (PFRDA) has enforced a revised charge structure for the National Pension System (NPS) and NPS Lite from October 1, allowing Points of Presence (PoPs) to collect a standardized one-time onboarding fee of ₹200 per Permanent Retirement Account Number (PRAN).

Tags: State Bank of India Reserve Bank of India NPCI Central Board of Direct Taxes PFRDA