Reports of cash shortages at some ATMs in smaller cities and towns have raised concerns among customers.
However, the Reserve Bank of India (RBI) has assured that there is enough currency in the system and that it will ensure ATMs and bank branches continue to receive adequate cash supplies.
The issue gained attention after the Confederation of ATM Industry (CATMi), which represents ATM operators and service providers, highlighted difficulties in getting enough cash for ATM replenishment.
Why Are ATM Operators Concerned?
According to industry representatives, some ATM operators have been struggling to obtain the cash needed to refill machines, especially in Tier-2 and Tier-3 cities.
CATMi has alleged that a large share of available cash is being directed towards ATMs in major metro cities.
The industry body claims this has left some smaller towns facing cash shortages.
The organization has also reportedly sought compensation of Rs 100 crore from the banking industry, citing losses caused by ATM downtime.
Industry data suggests that ATM operators received only 57% of their required cash in April 2026, compared to around 80% in November 2025.
Operators say the situation has gradually worsened over the past several months.
SBI’s ATM Network Under Spotlight
The issue was reportedly discussed during a meeting held on June 5 between RBI officials, State Bank of India (SBI), and ATM operators.
SBI operates around 65,000 ATMs across India, making it the country’s largest ATM network.
Industry representatives claim that a significant portion of cash is being allocated to SBI’s metro-city ATMs, leading to shortages in other locations.
Some ATM operators believe this imbalance is affecting cash availability in smaller cities where customers still depend heavily on cash transactions.
RBI Says There Is No Currency Shortage
Despite these concerns, the RBI has made it clear that there is no overall shortage of currency in the country.
RBI data shows that currency in circulation stood at more than Rs 42.56 lakh crore as of May 29, 2026.
This is about 12% higher than the level recorded a year earlier.
Speaking after the latest monetary policy announcement, RBI Governor Sanjay Malhotra said the central bank regularly estimates the country’s currency requirements and supplies banks accordingly.
He assured that if any shortage arises, the RBI will ensure ATMs and bank branches are refilled with sufficient cash.
ATM Usage Is Falling as Digital Payments Grow
The concerns come at a time when ATM transactions are steadily declining.
According to CATMi, monthly ATM cash withdrawals have dropped from around 57 crore transactions in January 2023 to about 44 crore transactions by September 2025.
The growing popularity of UPI and other digital payment methods has reduced dependence on cash. At the same time, ATM operators are facing rising costs, including fuel expenses, maintenance costs, and higher wages.
Industry experts say these challenges are putting pressure on ATM businesses, especially in smaller towns where transaction volumes are already lower.
What Does This Mean for Customers?
For now, customers do not need to worry about a nationwide ATM shutdown.
While some ATMs in smaller cities and towns may occasionally face cash shortages, the RBI has assured that sufficient currency is available in the system.
There is currently no official plan to reduce ATM services.
Customers may experience temporary disruptions at certain locations, but banking authorities have indicated that steps are being taken to maintain smooth cash availability across the country.
