Cash Shortages Threaten ATMs in Smaller Cities, Warns Confederation of ATM Industry
ATMs in small hubs may run out of cash: Confederation of ATM Industry
Image: The Economic Times
The Confederation of ATM Industry has raised concerns about cash shortages in tier 2 and tier 3 cities, primarily due to State Bank of India's cash distribution practices. They seek ₹100 crore in compensation from the banking sector and warn of potential ATM shutdowns if the issue is not addressed.
- 01The Confederation of ATM Industry (CATMi) is requesting ₹100 crore in compensation from banks due to cash shortages in smaller cities.
- 02State Bank of India (SBI) is accused of disproportionately allocating cash to tier 1 cities, affecting ATMs in tier 2 and tier 3 locations.
- 03The number of ATMs in India has decreased from over 253,000 to about 251,000, with the decline primarily affecting rural and semi-urban areas.
- 04Monthly ATM withdrawals dropped from 570 million in January 2023 to 439.5 million by September 2025, indicating reduced usage.
- 05Rising operational costs and a cash availability crisis are straining the ATM ecosystem, with some operators already operating below viability.
Advertisement
In-Article Ad
The Confederation of ATM Industry (CATMi) has expressed serious concerns regarding cash shortages in tier 2 and tier 3 cities, attributing the issue primarily to the State Bank of India's (SBI) cash distribution practices. CATMi is seeking ₹100 crore in compensation from the banking sector, highlighting that SBI, which operates the largest ATM network in India with approximately 65,000 machines, is routing most cash to tier 1 cities. This has left ATMs in smaller towns under-supplied, affecting consumers in these underserved areas. The industry has reported losses exceeding ₹100 crore due to reduced transaction fees as many ATMs remain offline. CATMi has warned that if the situation does not improve, several ATM portfolios may become unviable, leading to widespread shutdowns. Additionally, rising operational costs and a significant decline in monthly ATM withdrawals have compounded the crisis, raising alarms about the sustainability of the ATM ecosystem. The number of ATMs in India has also decreased, indicating a worrying trend for cash accessibility in rural and semi-urban regions.
Advertisement
In-Article Ad
The cash shortages could lead to widespread ATM shutdowns in smaller cities, affecting consumers' access to cash.
Advertisement
In-Article Ad
Reader Poll
Do you believe that the cash distribution practices of SBI should be revised?
Connecting to poll...
Read the original article
Visit the source for the complete story.