In just a span of a year, about 4,000 automatic teller machines, or ATMs, have been shut in India. This has happened despite the country witnessing an all-time high cash circulation.
But are banks in India are phasing out ATMs and cash recycler machines?
According to a report by The Economic Times, banks are shutting down more ATMs and cash recycler machines than opening.
As per the data from the Reserve Bank of India, or RBI, the number of ATMs in the country by the end of September 2024 decreased to 215,000 from 219,000 a year ago.
Most of the ATMs that were shut were not located on the premises of bank branches or were off-site ATMs.
The decline in the number of ATMs in India comes at a time when cash in circulation in the country is Rs 34.70 lakh crore, a whopping 100 per cent increase since the demonetisation.
In FY22 cash transactions accounted for 89 per cent of all deals. During the same period, cash in circulation accounted for 12 per cent of gross domestic product.
As per the ET report, the ATMs and cash recycler machine numbers are falling in India due to the increasing popularity of digital payments, specifically UPI and a strategic focus on digital transformation.
Also, factors including RBI regulations on free ATM transactions, interoperability, and interchange fees have discouraged ATM investments.
As per a 2022 RBI report, ATM penetration in India remains low with only 15 such machines available for 100,000 people
Industry experts predict that India will soon be adopting a global model of two ATMs per branch, one on-site and one off-site, as banks continue to balance physical and digital infrastructure to meet growing needs of customers.
With inputs from agencies.
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