The decline comes amid the rapid adoption of digital payment systems, particularly UPI, which has reduced the need for cash-based transactions.

India’s ATM network is shrinking and cash withdrawals through ATMs are falling, signalling a shift in the way consumers access and use money. But usage of micro-ATMs is increasing. While ATMs are standalone machines installed by banks for self-service cash withdrawals and other banking transactions, micro-ATMs are portable devices operated by banking correspondents or local shop agents that allow customers to access banking services using Aadhar authentication or debit cards.

ATMs out of favour

The number of ATMs declined for the second consecutive year to 2.51 lakh in FY25 from a peak of 2.55 lakh in FY23, according to RBI data. At the same time, cash withdrawals through debit cards at ATMs fell for the third straight year. Transaction volumes declined from 68,975 lakh in FY23 to 53,394 lakh in FY26, while the value of withdrawals dropped from ₹32.8 lakh crore to ₹28.5 lakh crore in the same period.

The decline comes amid the rapid adoption of digital payment systems, particularly UPI, which has reduced the need for cash-based transactions. “While digital payments such as UPI are a major catalyst for reduced ATM withdrawals, changing consumption patterns have also contributed to the decline,” said Ramkumar Subramanian, Partner, Grant Thornton Bharat. The growth of e-commerce and the availability of multiple digital payment options at retail outlets have made cash increasingly redundant for many consumers, he added.

Experts believe the trend reflects a broader behavioural shift that began during demonetisation and accelerated during the Covid-19 pandemic. “A decline in ATM volumes is not a surprise. It reflects the typical S-curve phenomenon, where a new technology such as UPI cannibalises the transactional use of cash,” said Prof Anil Sood, Institute for Advanced Studies in Complex Choices (IASCC).

financial inclusion

While traditional ATMs are witnessing lower usage, Micro ATMs continue to gain relevance. Cash withdrawal volumes through Micro ATMs rose to 12,126 lakh transactions in FY26, with withdrawal value increased 8.8 per cent year-on-year to ₹3.22 lakh crore. In March 2026, AePS-enabled Micro ATMs were the only channel to record growth in withdrawal value, rising 3.3 per cent compared with March 2025, even as debit card ATM withdrawal value declined 5.4 per cent.

According to experts, the growth of Micro ATMs is closely linked to financial inclusion efforts. Operated by banking correspondents, these devices provide access to cash and banking services in rural and underserved areas while also facilitating the distribution of government benefits.

Experts believe ATMs are unlikely to disappear, but may evolve into a backup cash-access infrastructure. “ATMs and micro-ATMs are likely to become cash-access back-up systems rather than primary payment infrastructure,” said Sood. As digital payments continue to expand, ATMs could become a niche service in an increasingly cash-light economy.

Published on June 17, 2026