Published: June 2026 | Defence Banking Updates | Pensioners & Armed Forces Personnel
In an important development affecting lakhs of serving Armed Forces personnel, Agniveers, Officer Cadets, veterans and defence pensioners, the State Bank of India (SBI) has revised its policy regarding free ATM transactions under Defence Salary Package (DSP) and Defence Pension Package Accounts.
As per Banking Advisory No. 05/2026 issued by the Adjutant General’s Branch, Integrated Headquarters of Ministry of Defence (Army), the revised ATM transaction rules will come into effect from 1 October 2026.
The change primarily impacts the number of free ATM transactions available on other banks’ ATM networks, while transactions conducted at SBI ATMs will continue to enjoy the existing benefits.
Key Highlights
✔ New ATM transaction rules effective from 1 October 2026
✔ Applicable to Serving Personnel, Agniveers, Officer Cadets and Pensioners
✔ Unlimited free transactions at SBI ATMs continue
✔ Free transactions at other bank ATMs reduced
✔ Defence Salary Package (DSP) and Defence Pension Package accounts covered
What Does the Banking Advisory Say?
According to the advisory issued by the Ministry of Defence (Army), SBI has reviewed its service charge policy relating to ATM transactions for Defence Salary and Pension Package accounts.
The revised policy changes the number of free ATM transactions available on other banks’ ATM networks.
The advisory has been circulated to Army Commands, Corps Headquarters, Regimental Centres and various defence establishments for dissemination among serving and retired personnel.
Existing vs Revised ATM Transaction Limits
The revised policy can be understood from the following comparison:
| Particulars | Existing Rules | Revised Rules (Effective 1 Oct 2026) |
| Free transactions at SBI ATMs | Unlimited | No Change |
| Free transactions at Other Banks’ ATMs | 10 free transactions per month | 5 free transactions per month |
What Remains Unchanged?
The biggest relief for Defence Salary Package account holders is that:
Unlimited free ATM transactions at SBI’s own ATM network will continue.
There is no change in this facility.
What Has Changed?
The major change is regarding transactions conducted on other banks’ ATMs.
Earlier
DSP and Defence Pension account holders were entitled to:
- 10 free ATM transactions per month
- Across other banks’ ATM networks
From 1 October 2026
The entitlement will be reduced to:
- 5 free ATM transactions per month
- Across other banks’ ATM networks
Any transaction beyond the free limit may attract charges as per SBI’s applicable schedule of charges.
Who Will Be Affected?
The revised guidelines apply to:
Serving Defence Personnel
- Army personnel
- Defence civilian categories covered under the package
- Personnel drawing salary through SBI DSP accounts
Agniveers
The advisory specifically mentions that the revised policy will apply to Agniveers enrolled under the Agnipath Scheme.
Officer Cadets
Officer Cadets maintaining Defence Salary Package accounts will also be covered.
Defence Pensioners
Retired Armed Forces personnel receiving pension through SBI Defence Pension Package accounts will be affected by the revised limits.
Understanding Defence Salary Package (DSP)
The Defence Salary Package (DSP) is a specialized banking product offered by SBI for Armed Forces personnel.
The package generally includes:
- Zero balance benefits
- Enhanced insurance coverage
- Personal accident benefits
- Concessionary banking services
- Preferential loan facilities
- Special ATM transaction benefits
- Dedicated customer support
Over the years, DSP has become one of the most popular banking arrangements among serving soldiers and veterans.
Why Is This Change Important?
Many defence personnel frequently use ATMs of different banks due to:
- Posting in remote locations
- Operational deployments
- Limited availability of SBI ATMs
- Travel requirements
- Convenience factors
The reduction from 10 to 5 free transactions at non-SBI ATMs means account holders may need to plan withdrawals more carefully to avoid additional charges.
How Can Defence Personnel Avoid Extra ATM Charges?
1. Prefer SBI ATMs
Since SBI ATM transactions remain unlimited and free, using SBI ATMs whenever possible is the simplest solution.
2. Withdraw Larger Amounts Less Frequently
Instead of multiple small withdrawals, personnel may consider fewer withdrawals within safe financial limits.
3. Use Digital Payments
UPI, internet banking and mobile banking can help reduce ATM dependence.
4. Track Monthly ATM Usage
Keep a count of transactions performed at non-SBI ATMs to stay within the revised limit of five free transactions.
Impact on Defence Pensioners
Many defence pensioners rely on ATM withdrawals for routine expenses.
The revised policy means pensioners should:
- Prefer nearby SBI ATMs whenever available.
- Use digital payment methods where feasible.
- Monitor monthly ATM usage carefully.
For pensioners residing in areas where SBI ATM availability is limited, the change may increase banking costs if the free transaction limit is exceeded.
Effective Date
The revised ATM transaction guidelines will become operational from: 1 October 2026
Until that date, the existing policy continues to apply.
What Defence Personnel Should Do Now
Before October 2026, account holders should:
- Familiarize themselves with the revised rules.
- Identify nearby SBI ATM locations.
- Consider greater use of UPI and mobile banking.
- Inform family members operating joint or pension-linked accounts.
- Monitor future advisories issued by SBI and Defence authorities.
Conclusion
The latest revision in SBI’s Defence Salary Package ATM policy brings a significant change for serving soldiers, Agniveers, Officer Cadets and defence pensioners. While unlimited free transactions at SBI ATMs remain intact, the reduction of free transactions at other banks’ ATMs from 10 per month to 5 per month may require better planning of cash withdrawals.
As the new rules become effective from 1 October 2026, defence personnel and pensioners have sufficient time to adjust their banking habits and avoid unnecessary ATM charges.
The advisory serves as an important reminder that while DSP accounts continue to provide several exclusive benefits, users should stay informed about policy updates that may affect their day-to-day banking experience.