ATM Cash Shortages To Be Addressed Promptly; Polymer Notes Under Review: RBI Governor

New Delhi, Jun 6 (KNN) Reserve Bank of India (RBI) Governor Sanjay Malhotra on Friday assured the public that cash shortages at ATMs would be addressed promptly, even as industry data revealed a significant and worsening gap between cash demanded for ATM replenishment and cash actually supplied by banks.

ATM Cash Fulfilment Deteriorating

The Confederation of ATM Industry (CATMi), in a letter dated June 2 to the Indian Banks' Association (IBA), flagged that its members have faced increasing difficulties in drawing cash for ATM replenishment from bank branches and currency chests across several states since late December 2025, Business Standard reported.

According to CATMi data, national cash fulfilment — the proportion of indented cash actually received — fell sharply to 57 per cent in April 2026 from around 80 per cent in November 2025, with the shortfall widening correspondingly from 20 per cent to 43 per cent. 

In absolute terms, ATM operators collectively indented nearly Rs 94,000 crore in both March and April, but received only Rs 61,000 crore in March and Rs 54,000 crore in April.

The deterioration has had a direct impact on transaction volumes. Average daily transactions per ATM fell to 65 in April from 74 in October 2025, with steeper declines in the worst-affected states.

CATMi also noted that the growing adoption of digital payments and UPI is a structural driver of lower ATM usage, compounded by the increase in the out-of-network ATM transaction charge to Rs 23 per withdrawal from May 2025 — making cash withdrawals costlier and accelerating the shift to digital channels.

RBI's Response

Governor Malhotra sought to provide reassurance, stating that adequate currency is available in the system. "Our full effort will be to ensure that wherever there is a shortage of currency in one or two places at ATMs, we will deliver currency there promptly and at a rapid pace," he said, as cited by Business Standard.

Polymer Banknotes Under Evaluation

Separately, Malhotra confirmed that a proposal to introduce polymer banknotes is under consideration, though at a preliminary stage. "We are examining the pros and cons of it and whether it will be worthwhile to do it. It is still at a preliminary stage," he said. 

India currently uses 100 per cent cotton-based paper for printing banknotes.

Cash Still Dominant Despite Digital Surge

Despite the rapid growth of digital payments, cash demand remains robust. The value of banknotes in circulation grew 11.9 per cent year-on-year to Rs 41.23 trillion by end-March 2026, while volume rose 10.5 per cent to 171.32 billion pieces. The Rs 500 note continued to dominate, accounting for 85.5 per cent of total currency value in circulation. 

An RBI household survey also confirmed continued strong preference for cash among individuals and small retail sellers.

Expenditure on security printing declined to Rs 4,875 crore in FY26 from Rs 6,373 crore the previous year, reflecting a reduced banknote indent during the year.

(KNN Bureau)