Widespread Cash Shortages Reported at Indian ATMs
Despite a surge in digital transactions, many Automated Teller Machines (ATMs) across India are running low on cash, causing inconvenience for millions. Operators attribute this growing problem to a consistent decline in the cash provided by banks for replenishment, coupled with escalating operational costs.
Operators Face Mounting Challenges
The Confederation of ATM Industry (CATMi), representing ATM operators nationwide, has formally alerted the Indian Banks Association (IBA) about the critical situation. According to CATMi, the cash fulfillment rate—the percentage of cash operators receive against their requirements—has plummeted. What was 80 percent in November 2025 dropped to 64 percent by March 2026 and further to a mere 57 percent in April.
CATMi's letter states, “Since late December 2025, our members have faced sustained difficulty drawing cash for ATM loading from bank branches and currency chests across several states.” This consistent shortfall means operators are increasingly unable to keep ATMs stocked.
Rising Costs and Inadequate Interchange Fees
Beyond the cash supply issues, ATM operators are grappling with rising expenses. Transportation costs, fuel prices, and wages for security personnel and other staff have all increased, adding significant pressure to their business models. While the interchange fee—what one bank pays another when a customer uses a different bank's ATM—was raised from Rs 19 to Rs 21, industry insiders assert this modest increase is insufficient to offset the burgeoning operational costs.
Operators also point out that their current contracts were based on a natural annual decline in ATM usage of 2.5-3.0 percent. However, the actual decline, accelerated by the widespread adoption of digital payment platforms like UPI, has been far steeper. This rapid shift, combined with increased charges for ATM use beyond free limits, has further eroded operator revenues.
RBI's Stance and Impact on Vulnerable Populations
When questioned about the cash crunch, Reserve Bank of India Governor Sanjay Malhotra assured the public that the central bank monitors currency requirements and would ensure sufficient cash is supplied to refill ATMs and bank branches if shortages arise. He emphasized the RBI's commitment to maintaining currency availability.
While urban dwellers might rely heavily on digital payments, the cash shortage disproportionately affects specific segments of the population. Recipients of direct benefit transfers (DBT), senior citizens who prefer cash for daily necessities, and small traders who depend on cash transactions are particularly vulnerable to ATMs running dry in their localities.
Currency in Circulation Remains High
Paradoxically, the overall currency in circulation in India remains substantial, reaching over Rs 42.56 lakh crore as of May 29, 2026, marking a 12 percent increase year-on-year. This suggests the issue is not a lack of currency in the system, but rather challenges in its distribution and replenishment to ATM networks.
“We will ensure if there is a shortage, we have sufficient currency to go and fill and refill the ATMs and bank branches,” said RBI Governor Sanjay Malhotra.
CATMi has urged member banks to prioritize the restoration of reliable cash availability for ATM replenishment, calling for urgent engagement to resolve these critical issues affecting access to physical currency across the country.