Fewer ATM visits, bigger withdrawals: How Indians are using cash now

In India people are using cash a lot less than they used to. Not many people are going to the ATM every day because they are using digital payments like UPI for small things.. When people do go to the ATM they are taking out more money.

We can see this happening when we look at the numbers from places: fewer people are using the ATM and less cash is being given out but the amount of money people take out at one time is getting bigger. India and digital payments, like UPI are changing the way people use cash. The way people use money is changing because of technology like being able to pay right away. It is also changing because people want to save time and money so they make bigger withdrawals from the bank. This helps them avoid fees. The banks are also changing the way they work with money machines and the types of bills they give out. Even though people are using cards and phones to pay often cash is still being used, just in different ways and in different places like in smaller towns and cities and for everyday things that people buy from vendors on the street. The result is that cash is not going away people are just using cash carefully and in different parts of the economy like for certain purchases or, in certain areas cash is still the main way that people pay for things.

1. What the numbers tell us are the points that stand out. The numbers say some things that we should know about. What the numbers say is really interesting.

Here are the important things to know to get started:

People in the industry and media are talking about some numbers from CMS Infosystems. These numbers show that the average amount of money people take out from ATMs is higher than it was year.

The average amount of money people take out from ATMs is now around ₹5,600 to ₹5,800, for the year 2025. This is more than it was the year

The amount of money people take out from ATMs went up by about 4 to 4.5 percent in 2025. So the average ATM withdrawal amount is higher now than it was a year ago.

The number of bank ATMs in India is not going up anymore. In fact it went down a little in the year 2025. According to reports that looked at the data from the Reserve Bank of India the number of ATMs decreased from around 253,417 to about 251,057 by the end of March 2025. This happened because private banks decided to remove some of their machines that were not on their premises. The decrease is not very big. It is important because it shows the direction things are going. The bank ATMs in India are actually getting fewer. This is what the data from the Reserve Bank of India is showing about the bank ATMs, in India.

Digital payments volumes, led by United Payments Interface are really taking off. They are handling hundreds of billions of transactions every year. We can see this from the information that National Payments Corporation of India and the government put out well as what the press is saying. United Payments Interface volumes have gone up a lot in the few years. This means that a lot of payments that people used to make with cash are now being made digitally with United Payments Interface.

Put together: fewer ATM visits (or fewer ATMs), more digital micro-payments, and larger withdrawals per visit.

2. Why the idea of having visits but making bigger withdrawals makes sense to people. The idea of visits bigger withdrawals is something that people can understand. It is, about having visits, bigger withdrawals and this is what makes it easy for people to do. The concept of visits bigger withdrawals is simple and that is why it makes behavioural sense.

To figure out why this pattern is happening consider the choice that someone who uses cash has to make:

When you go to an ATM there are some things you have to deal with. You have to spend time going you have to wait in line you might have to pay a fee to get your money and you might even find out the ATM is out of cash. All these things make it a hassle to take out amounts of money from an ATM especially when you have other ways to pay for things digitally. Using an ATM for withdrawals is just not worth it when you have digital alternatives, like online banking or mobile payments.

People use payments like UPI, cards and wallets for small purchases every day. They use payments for things like buying from street vendors, kiranas taking taxis getting deliveries and subscription services. Since most small payments can be made digitally people do not need to carry change or go to the bank often to withdraw small amounts of money. Digital payments make it easy for people to make purchases without needing tiny change. People can use payments for all kinds of small things, including digital payments for street vendors and digital payments, for kiranas.

When people have to pay a fixed cost they start taking out money often but they take out more money at a time. They do this so they have cash for things like tips or paying people directly or for when they are in places where they cannot use digital payments like some markets or in an emergency. This means that even though people are taking out money often the amount of money they take out each time is bigger. This is common sense and it is something that we can see happening when we look at the information from the CMS data. The people are still using cash for some things, like tips or informal payments and they need to have some cash, for these things so they take out a buffer of cash. The CMS data shows us that people are taking out money at a time even if they are not taking it out as often.

3. Structural drivers behind the shift

The trend can be explained by a lot of changes that work together. These changes are, like pieces of a puzzle that fit together to make the trend happen. The trend is because of changes that are connected to each other.

3.1 Explosion of low-cost digital rails (UPI and interoperable systems)

The growth of UPI is really the thing that is helping on the supply side. UPI made it so people do not need to use cash for purchases as much. This is because UPI lets people send money to each other and, to stores instantly and it does not cost a lot. As more people started using UPI people began to use it for things they used to pay for with cash. This changed everything because now people are not using much cash for small things. UPI is really changing the way people make payments.

3.2 ATM network economics and consolidation

Using ATMs is not free. Banks and the people who run ATMs have to pay for things, like managing cash, security and getting cash to the machines. This costs them money. Because people are not using cash much some banks, especially private banks are trying to save money. They are doing this by getting rid of ATMs that are not used much and are located outside of their main offices. This means there are ATMs around so sometimes people have to travel farther or spend more time to get their money out. This makes people want to get money out at one time so they do not have to go to the ATM as often. The Reserve Bank of India has reported on this. It has been written about in the news.

3.3 Denomination mix and RBI policy changes

The government has made some changes to how money is handled. They are getting rid of the ₹2,000 notes. They want the machines that give out money to have more ₹100 and ₹200 notes in them. They are also changing how the money is stored and given out.

When there are not many big notes around or when the machines that give out money are set up differently people might start taking out money in different ways. For example people might take out money once a month of taking out a little bit of money many times. This is because cash money is not stocked and dispensed in the way as it used to be all because of these policy and operational moves like the phasing out of ₹2,000 notes and the new guidelines on ATM cassette composition and the changes, to currency chest operations. The RBI’s cash-management and denomination policies are part of this picture.

3.4 Regional and demographic differences: rural & semi-urban persistence of cash

Metros and big cities have gone digital quickly. Cash is still very important in many smaller towns and villages. This is also true for people who work informally like laborers or for small shops and farmers markets.

CMS looked at the numbers. Found that ATMs in smaller towns and villages give out more cash than ATMs in big cities. This shows that cash is still widely used in places where people do not have access to digital payments or where shops do not accept digital payments.

The thing is, people, in areas still need cash so it is not going away it is just being used more in those areas. Cash is getting concentrated in these places because that is where people need it the most.

4. Who is changing their behaviour. How is that happening with the user profiles? We want to know what is going on with the user profiles and who is actually changing their behaviour. The user profiles are really important here because we need to understand how people are interacting with them and what makes them change their behaviour.

We can group people who use cash into categories based on how they relate to digital payment systems and how much they need to use cash.

People who live in cities and do things digitally first: They usually use UPI or cards to pay for things. They only use cash for things, like giving tips or paying for extras that are not official. They do not take out cash from the bank often. When Digital- urban consumers do take out cash they take out a moderate amount but it is just enough to cover the cash expenses they had planned for Digital-first urban consumers.

Semi-urban and rural users like to use a mix of cash and digital payments. For these -urban and rural users cash is still very important when they go to markets where small merchants only accept cash. This is also true, in places where the internet connection’s not very good or where different digital systems do not work well together. Semi-urban and rural users may take out money from the bank but they do this less often like when they need to buy things for festivals or make seasonal payments.

People who like to use cash, older folks still prefer to use cash for keeping track of their money or because they do not trust digital payments. They might not stop using cash quickly as others but even they are starting to use digital payments for some things. They like to use cash for budgeting. That is why they still use it a lot. Older people who like to use cash are using digital payments, for certain things like some transactions.

People who work for wages and small shop owners: They still use cash a lot for their wages and to buy things. The way they take out cash is, like how they run their businesses. Sometimes they need to take out cash to pay their workers or they save up cash in their own areas.

Businesses and merchants have to deal with money every day. A lot of businesses use cash for things they need to buy like making change and in case of an emergency they need some money. For merchants who accept payments the need for cash is not as high.. For merchants who do not accept digital payments the need, for cash is still the same. Businesses and merchants still need cash.

The thing is people are different when it comes to money. Some people do not use cash all. On the hand money management for others is all, about cash.

When you look at the picture you see two things happening with money machines. There are money machines and people are visiting them less often. At the time when people do visit a money machine they take out more money than they used to.

5. Cash logistics: banks, ATM operators and the supply chain

Banks and companies that handle cash have changed the way they do things. This includes companies, like CMS Infosystems. CMS Infosystems has a lot of ATMs. It also helps move cash around.

There are ATMs that people do not use a lot. The people who run these ATMs are closing the ones that are not doing well to save money. They are closing the ones that’re not at their main office. This means the ATMs that are still open are used often.. It can be harder for some people to get to an ATM. The Reserve Bank of India and the companies that run the ATMs are keeping track of this change. The ATMs that are left are being used often. This is because there are ATMs now. The Reserve Bank of India and the industry are reporting on this. ATMs are being closed to costs.

We should focus more on micro-ATMs and digital outreach. In some areas it is not practical to have ATMs so micro-ATMs are a good option. Micro-ATMs are like a card reader that someone helps you use. They work with business correspondent networks to give people cash services at a cost. This way, micro-ATMs and digital outreach can help people, in these areas get the cash services they need.

Denomination management is a deal. Operators have to make sure they have the mix of notes in the cassettes. This way users can get the notes they need. The Reserve Bank of India sometimes tells them to give out ₹100 and ₹200 notes. This changes the way people take out money. People may take out amounts so they do not have to come back for the right notes. This is because they want to avoid making a trip, to the bank or machine to get the notes they need. Denomination management is important for operators to get right especially when the Reserve Bank of India is telling them what to do with ₹100 and ₹200 notes.

6. Implications of the trend

6.1 For consumers

Digital payments are really helpful for everyday spending because they make things easier. You do not have to carry a lot of cash with you. This is good because small purchases are often cheaper when you use payments.

However there is a problem with this. If there are not ATMs around it can be very hard to get cash when you need it. You might have to travel a way to find one and this can be a waste of time. Digital payments and cash are both important so we need to find a way to make it easy to use both. Digital payments are great, for everyday spending but sometimes you just need cash.

People need to think about when they take out money from their accounts. For example they should take out money at the start of the month to buy things that only accept cash. It is also an idea for consumers to have a little extra money set aside which is called a cash buffer in case something unexpected happens with their cash. This cash buffer will help consumers with cash- needs when they need it.

6.2 For merchants

Having fewer small cash transactions means people are not using cash much for little things. This can make it easier for businesses to deal with money and not have to worry about giving change all the time.. For small businesses that get a lot of customers who pay with cash this change can affect how people buy things from them. Fewer micro-cash transactions can really change things for these merchants who rely on cash transactions.

People are going to spend money on QR and point of sale systems. They want to get paid and they do not want to lose customers. More small business owners will buy QR or point of sale systems that work with systems so they can get paid easily. This is because they want to be able to take payments and they do not want to lose business to other people who already have QR and point of sale systems.

6.3 For banks and ATM operators

The banks are trying to make sense of their network. They will probably keep on closing some of the ATMs. Put more machines where a lot of people use them. They will move the ATMs away, from places where not many people use them.. The banks have to make sure they are making enough money and that people can still get to the ATMs when they need to. The Reserve Bank of India has data that shows this is already happening with the ATMs. The network rationalization of the ATMs is something the banks have to do. The network rationalization will help the banks to have ATMs in busy places and fewer ATMs in quiet places.

The revenue mix is changing. This is because we are seeing small withdrawals. This means there is work for us to do when it comes to transactions. As a result we might make a little money from our cash services. On the hand when people take out larger amounts of cash it changes the way we think about risk when handling cash. The revenue mix changes are affecting our cash services in these ways.

6.4 For cash-in-transit and logistics firms

Companies will change the way they do things. They will find routes so they can make fewer trips to refill cash. These trips will be made to get cash at one time. The companies will also change the way they store cash and the types of money they keep. They will do this to follow the rules made by the Reserve Bank of India about the types of money that can be used.

6.5 For policy and financial inclusion

There are concerns about fairness when it comes to money. If we get rid of a lot of ATMs and people have to use things instead some groups of people might have a harder time getting cash. These groups include people and those who live in very rural areas. The people who live in these areas might not have a lot of ways to get cash if they need it. This is a problem for the elderly and for people who live away, from cities. They need to be able to get cash from ATMs or other places. If we do not have ATMs then these people will have a harder time getting the money they need.

Central banks have a job to do. They need to make sure that digital payments are easy to use. At the time they have to make sure that people who want to use cash can still get it. This is important for the economy to grow in a way that includes everyone. It is also important for people who work in jobs that are not officially recognized. So central banks must balance payments, with fair cash access. They need to do this for growth and to support the informal economy, which is made up of these unofficial jobs. Central banks have to think about payments and fair cash access all the time.

7. Common myths and clarifications

People say that cash is going away. They think that soon we will not be using cash anymore. The idea that cash is disappearing is a common one.. Is it really true that cash is disappearing? The notion that cash is disappearing is something that a lot of people believe in.

The way people use cash in the economy is changing. People are using cash in areas and they are being more careful about how they use it. If you look at the information, from the CMS and the RBI you can see that people are taking out cash when they withdraw money from the bank even though there are fewer ATMs around. For a lot of people cash is still very important. Cash remains important for segments of the economy and people are still using cash in certain parts of the country, where the CMS and RBI data shows that cash is being used differently and people are using it more deliberately.

People think that digital payments mean we do not need cash all. This is not true. Digital payments are really useful. They do not get rid of the need, for cash entirely. We still need cash for payments.

Reality is that we are not there yet. There are still things like transactions and certain types of merchants that deal with cash. And lets not forget about situations where the power’s out cash is still relevant, in those cases. Cash remains relevant because of these things.

Myth: “Fewer ATMs = worse financial inclusion.”

Reality is not always the case. Inclusion also depends on ways for people to get to their money like bank branches, micro-ATMs and digital onboarding.. If we do not handle consolidation correctly it can hurt people who do not have these other options. This is especially true for people who rely on onboarding and other alternative access channels, like bank branches and micro-ATMs.

8. There are some patterns that are worth noting. These regional patterns are really important to think about. The regional patterns can tell us a lot about what’s going on in different areas. We should take a look at the regional patterns to understand them better. The main thing is to remember that regional patterns are worth noting because they can help us learn more, about the patterns.

People who live in -urban and rural areas often take out more cash from each ATM machine than people who live in big cities. This means that when there is cash in these areas people use it a lot. The company CMS says that areas that are semi-urban and rural or what they call SURU areas can have cash being dispensed from each machine. This shows that there are some places where people really need cash and this is because not many people in these places are using digital payments yet. SURU areas still have a lot of cash demand because digital payments are not as common, in these places.

People who live in cities are using payment methods really fast for their everyday transactions. They are using cash for regular things. Now they are using cash for things like tips or when they need to pay for something at the last minute or in an emergency. Digital payment methods are becoming very popular in areas like Metro cities. Metro cities are seeing a change in the way people make transactions and they are using digital rails, for daily things.

9. Likely medium-term evolution (what to expect next)

The way people pay for things is changing. More and more people are using digital micro-payments. This means that United Payments Interface or UPI and card networks that work with each other will keep getting used of cash for small purchases. We can expect to see more stores accepting these payments and new ideas coming out like ways to use UPI without the internet and better quick response codes or QR codes.

The ATM network is getting better. It is focusing on how much work it can do. Banks will keep making the ATM network better. They will keep the machines that are used a lot in places but the ones that are not used much will be removed or changed into small ATMs. The Reserve Bank of India will watch out for any problems people have when they try to get to their money. They might tell the banks to do more to help people who do not have a lot of money. The ATM network will still be important for people to get their money from the bank. Banks will make sure that the ATM network is working well and that people can use it easily.

The Reserve Bank of India makes decisions about Denomination and currency policy adjustments. These decisions are about which notes to print and what the ATM cassette requirementsre. For example they decide if there should be ₹100 notes or ₹200 notes available. This will affect how people take out money and the cost of handling cash. The Denomination and currency policy adjustments will have an impact, on cash handling.

People are using a mix of cash payments now. This is what we call payment behaviour. It is becoming very common. Individuals and businesses are using payments when it is easy and convenient.. They are using cash for some transactions. They choose digital or cash depending on the situation. Hybrid payment behaviour is the normal for individuals and businesses. They like to use payments for some things and cash, for other things.

We are going to see products that will help us with some problems. These products will include machines where you can put in cash and also take out cash. We will also have products that let you take out cash from a special machine that is usually used to buy things. The companies that make these machines will work on making them better more people can use them. They will also make it possible for people to pay for things digitally when their internet connection is not good. This will help people use physical cash when they are in areas with poor internet. New products like these will really help people who use cash-, in and cash-out kiosks and other digital payment modes. The goal is to make it easier for people to pay for things without using cash when the internet connection is poor.

10. Things that policymakers and banks and businesses need to pay attention to and take action on

Policymakers and banks and businesses should keep an eye on the economy.

They should also think about what they can do to help it.

Policymakers and banks and businesses have a role to play in this.

They need to work to make things better for everyone.

Some of the things that policymakers and banks and businesses should do include:

* Making sure people have access to money when they need it

* Helping businesses to grow and create jobs

* Keeping an eye on the economy and making changes when necessary

Policymakers and banks and businesses should always be thinking about how they can help the economy and make things better, for people.

For policymakers / RBI

Monitor access equity: Ensure vulnerable groups don’t lose fair access to cash as networks rationalise. Use data-driven mapping of ATM deserts and support alternative channels in underserved geographies.

Balance digitisation with cash reliance: Promote digital rails while keeping contingency arrangements and encouraging micro-ATM/BC networks rollout.

For banks and ATM operators

We need to look at the data to figure out how to make the most of our machines. We should get rid of machines that are not being used much.. We should also spend money on machines in places where people need them a lot like during festivals or harvest seasons or when people are going on pilgrimages. This way we can make sure we have machines where they are really needed.

Customer communication: Educate users about withdrawal planning, charges (if any), and digital alternatives.

Denomination planning is very important. We need to make sure the money in our cash boxes is what people in the area really need. For example we should have ₹100 and ₹200 notes, in places where people often buy small things and pay with cash. This way denomination planning can help us have the denomination notes, like ₹100 and ₹200 in the right places.

For fintechs and payment companies

Expand merchant onboarding: Target smaller merchants and informal markets with low-cost acceptance solutions.

Offline/low-connectivity modes: Build resilient modes for areas with intermittent connectivity to reduce cash dependence.

For retailers & merchants

We should be ready for two things: using methods when it makes sense but also keeping our cash handling practices working well for the times when we still need to use cash. This way we can use digital for the things that’re easy to do digitally and still have a good system for handling cash when we need to. We need to be good at using digital and good at handling cash so we can do both things efficiently. Digital is an option for some things but cash is still necessary for other things so we need to be ready, for both.

Change management: Plan for less frequent, larger cash inflows (e.g., managing float, safekeeping).

11. Practical tips for consumers

Plan trips to the ATM. If you think there will be ATMs, near you try to take out the cash you need all at once. But remember to be safe: do not carry much cash on you and do not store too much cash at home. This way you can avoid having to go to the ATM many times. Always think about safety when you are dealing with the ATM and cash. Plan your ATM trips carefully and try to take out the cash you need for the ATM in one go so you do not have to keep going to the ATM.

Use digital buffers: Keep small digital balances in trusted wallets/UPI-friendly accounts for day-to-day micro spend.

You have an options when it comes to getting cash. Micro-ATMs are one choice. Bank branches are another option. Then there are business correspondents. These can be used of full ATMs. Micro-ATMs and bank branches and business correspondents are all alternatives, to ATMs.

So you want to know about denomination awareness. It is an idea to think about the money you need. If you frequently need notes you should plan your withdrawals. You should try to get denominations when you take out money.. You can use merchant change services to break larger notes into smaller ones. This way you will have the notes you need. Denomination awareness is about having the right money, like small notes when you need it.

The thing with people using ATMs often but taking out more money at a time is not strange. It is what people do when they have easy ways to pay for small things digitally. At the time it costs money to keep cash machines and handle cash. People are not using cash less they are just using it when they really need to. They are being more careful, with cash and the machines that give out cash are being used efficiently. The ATM and cash system is getting better at giving people the cash they need. Policymakers and service providers should manage the transition so that digital convenience does not leave vulnerable groups behind, while businesses and customers adapt their cash-handling behaviours to reduce friction and cost.