India’s payments infrastructure is set for one of its most significant updates from April 1, 2026, as the Reserve Bank of India’s new authentication rules and revised banking norms reshape how users access and verify digital and ATM transactions.
NPCI BHIM Services Limited recently introduced biometric authentication on the BHIM app, enabling users to authorize UPI transactions up to ₹5,000 using fingerprint or facial recognition instead of a UPI PIN. The feature, available on both Android and iOS, covers peer-to-peer transfers, merchant QR payments, and online purchases. Payments above ₹5,000 will continue to require PIN entry.
The feature rollout aligns with the RBI’s upcoming “Authentication Mechanisms for Digital Payment Transactions Directions, 2025,” which mandates two-factor authentication across all domestic digital payments starting April 1. Each transaction must be verified using at least two factors such as PINs, passwords, device tokens, or biometrics, with one of them dynamically generated. Non-compliant banks will be liable for fraud risk under the new framework.
Major banks are also tightening ATM policies. HDFC Bank will begin including UPI-based cardless cash withdrawals within monthly free ATM transaction limits, with additional withdrawals incurring a ₹23 fee plus taxes. Punjab National Bank has reduced daily ATM withdrawal caps for several debit card variants, including Platinum and Gold series cards, while Bandhan Bank has limited customers to five free financial transactions per month at its own ATMs and introduced a ₹25 penalty for failed transactions due to insufficient funds.
Additionally, Jio Payments Bank, a subsidiary of Jio Financial Services, has launched a UPI-based cardless cash withdrawal facility through its business correspondent network. The service allows customers to scan a UPI QR code and withdraw cash without using a physical debit card, targeting rural and semi-urban customers with limited ATM access.
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