Concerns have emerged over cash availability at some ATMs in smaller cities and towns, but the Reserve Bank of India (RBI) has said it will ensure filling and refilling of the ATMs and bank branches and make
sure the cash dispensing machines have sufficient currency.
The issue came into focus after the Confederation of ATM Industry (CATMi), which represents ATM operators and service providers, raised concerns with the Reserve Bank of India (RBI) over difficulties in obtaining cash for ATM replenishment. According to industry sources cited by The Economic Times, CATMi has also sought compensation of Rs 100 crore from the banking industry, claiming losses arising from ATM downtime.
The industry body has alleged that a disproportionate amount of cash is being routed to ATMs in Tier-1 cities, particularly within the network of the country’s largest lender, State Bank of India (SBI). According to CATMi, this has led to cash shortages at some ATMs in Tier-2 and Tier-3 locations.
The concerns come despite currency in circulation remaining at elevated levels. RBI data shows currency in circulation stood at more than ₹42.56 lakh crore as of May 29, 2026, up around 12 per cent from a year earlier.
As per The Economic Times report, ATM operators raised the matter during a June 5 meeting with RBI and SBI officials. SBI operates around 65,000 ATMs across the country, the largest network in India. The report said the bank directly manages cash replenishment for nearly half of its ATM network, much of which is located in metro cities.
“The issue is specific to SBI. There is a real currency shortage-while smaller banks are managing, SBI has been caught in the wrong corner,” said the CEO of an ATM company, who did not wish to be identified, according to ET. “Most cash is being channelled to tier 1 locations, leaving the rest of the network under-supplied.”
Industry representatives have claimed that cash availability for ATM loading has been declining over the past several months. In a letter to the Indian Banks Association (IBA), CATMi stated that ATM operators received only 57 per cent of their cash requirement in April 2026, compared with 80 per cent in November 2025.
The body has warned that continued cash shortages could affect the viability of some ATM operations, particularly in smaller towns where transaction volumes are already under pressure.
However, RBI Governor Sanjay Malhotra indicated that the central bank has adequate currency supplies and will act if shortages arise. Speaking after the latest monetary policy announcement on June 5, Malhotra said the RBI prepares annual currency requirement estimates and provides cash to banks accordingly.
“We will ensure if there is a shortage, we have sufficient currency to go and fill and refill the ATMs and bank branches,” he said.
The concerns come despite currency in circulation remaining at elevated levels. RBI data shows currency in circulation stood at more than Rs 42.56 lakh crore as of May 29, 2026, up around 12 per cent from a year earlier.
At the same time, ATM usage has been declining as digital payments gain popularity. CATMi said monthly ATM cash withdrawals fell from about 57 crore transactions in January 2023 to around 44 crore by September 2025. Industry players say rising operating costs, including higher fuel expenses and wage costs, have added further pressure on ATM operators.
According to CATMi, most ATM operators are already working on thin margins, and prolonged cash shortages could make operations in certain locations financially challenging. The industry body has urged banks to work together to restore reliable cash availability for ATM replenishment, particularly in smaller cities and towns.
What it means for customers
For now, there is no indication of a nationwide ATM shutdown. While some operators have flagged cash availability issues in certain locations, the RBI has assured that sufficient currency is available and that shortages, if any, will be addressed. Customers in smaller towns may experience occasional cash-related disruptions at some ATMs, but there is currently no official plan to reduce ATM services.
