ATM Numbers Are Dropping Fast — Why India's Banking System Is Shifting To Digital

New Delhi: The Reserve Bank of India (RBI) is going for a reduction in ATMs across India amid the rise of UPI and digital transactions. As per the RBI data, the number of ATMs reduced from 219,000 in September 2023 to 215,000 in September 2024. The decline was seen in off-site ATMs, which fell from 97,072 in September 2022 to 87,638 in September 2024.The growing popularity of UPI and strategic focus on digital transformation have driven the RBI to trim the number of ATMs in India, a report in ET said. "The recent trends in ATM deployment reflect a shifting focus in India's banking sector as it navigates the dynamic landscape of consolidation, digital transformation and expansion into underserved regions," Ravi B Goyal, chairman of AGS Transact Technologies, told the publication."In recent years, public sector bank consolidation has led to more optimised networks, blending physical and digital infrastructure," he added.

Cash Still A Major Player In TransactionsThough cash still accounts for 89% of transactions in FY22 and 12% of the GDP, the ATM penetration in India remains very poor with just 15 machines per 100,000 people. Factors like RBI regulations on free ATM transactions, interoperability requirements, and interchange fees have contributed to a decline in ATM investments.India is likely to adopt a global model of having just two ATMs per branch, one on-site and one off-site, experts feel. Banks are expected to balance the two -- cash and digital infrastructure in the future to keep up with customers' evolving needs.