Currency in circulation stood at a record ₹42.54 lakh crore as of 22 May, up nearly 12% from a year ago, according to Reserve Bank of India () data.
Yet ATM operators are warning that some machines could run short of cash.
The Confederation of ATM Industry (CATMi), which represents ATM operators, cash logistics firms and service providers, has flagged a sharp decline in cash available for ATM replenishment. According to industry estimates, operators received only 64% of their cash requirement in March and 57% in April, Business Standard reported on Friday.
So, if there is more cash in the system than ever before, why are ATMs struggling to dispense it?
Why are ATM operators warning of cash shortages?
According to CATMi, ATM operators needed about ₹94,000 crore for replenishment in both March and April. However, only ₹61,000 crore was available in March and ₹54,000 crore in April.
The issue is partly economic.
Running an ATM network is expensive. Every machine needs regular cash replenishment, transportation, security, maintenance and monitoring. Those costs have risen sharply over the past few years. Fuel prices are higher, wages have increased and cash transportation has become more expensive.
At the same time, ATM usage is declining.
RBI data shows ATM transactions fell to 446.5 million in May from 498.4 million a year earlier, a decline of more than 10%. The value of withdrawals also dropped from around ₹2.64 trillion to ₹2.5 trillion.
This means operators are handling fewer transactions while facing higher operating costs.
The rapid adoption of has accelerated this trend. Although digital payments have reduced ATM usage, operators still need to maintain the same infrastructure to serve customers who continue to rely on cash.
Who is likely to be affected the most?
The impact is likely to be felt most by people who depend on cash for their daily needs.
For many people in large cities, an ATM running out of cash may be a minor inconvenience. They can usually find another ATM nearby or use UPI and other digital payment methods instead.
But the situation can be more difficult for senior citizens, pensioners, welfare beneficiaries, farmers and small traders who rely heavily on cash withdrawals.
Rural and semi-urban areas could be affected the most. Many people in these areas use ATMs to withdraw pensions, government benefits and other payments credited directly to their bank accounts. If an ATM runs out of cash, the nearest alternative may be far away.
are becoming more common, but they may not always be an option due to patchy internet connectivity or limited acceptance in some areas.
Can banks be fined if ATMs run out of cash?
Yes.
The RBI can impose penalties if ATMs remain out of cash beyond a certain period. Banks are expected to replenish ATMs on time and ensure customers have easy access to cash.
However, a single ATM running out of cash occasionally is unlikely to result in penalties. The RBI’s focus is on repeated or prolonged cash shortages that affect a large number of customers. If outages become frequent or widespread, banks could face regulatory action.
Should customers be worried?
Not really.
The warning from ATM operators does not mean deposits are at risk. Your money remains safely held in your bank account, irrespective of whether an ATM has cash available on a particular day.
Nor does it suggest a shortage of currency in the broader economy. In fact, RBI data shows cash in circulation continues to grow.
Consumers may, however, face occasional difficulty withdrawing cash, especially in smaller towns and rural areas where ATM replenishment could be affected.
A simple way to prepare is to avoid depending entirely on cash or a single ATM. Keep digital payment options such as UPI active and consider maintaining a small amount of cash for emergencies. That way, even if a nearby ATM runs out of cash temporarily, your day-to-day transactions are unlikely to be disrupted.