India’s banking sector is undergoing a remarkable transformation, marked by a strategic push to expand its Automated Teller Machine (ATM) network. This expansion is driven by a unique blend of government policies, technological innovation, and the enduring importance of cashMoney in physical form such as banknotes and coins. More in the country’s economy. Indian banks are planning a massive deployment of ATMs, aiming to enhance financial inclusionA process by which individuals and businesses can access appropriate, affordable, and timely financial products and services. These include banking, loan, equity, and insurance products. While it is recognised that not all individuals need or want financial services, the goal of financial inclusion is to remove all barriers, both supply side and demand side. Supply side barriers stem from financial institutions themselves. They often indicate poor financial infrastructure, and include lack of ne... More and meet the growing demand for cash access.
India’s ATM network has grown exponentially over the past decade. From around 200,000 ATMs in 2019, the count has surged to over 249,000 by 2024, reflecting a 25% increase in just five years. This growth is particularly notable given the global trend of declining ATM numbers. The expansion is not just quantitative but also strategic, with a focus on improving accessibility and functionality.
According to Finextra, India’s leading banks are planning to install more than 17,000 ATMs across the country’s to promote cash recirculationThe right to recirculate banknotes that have been checked for authenticity and sorted for fitness by banks and cash-in-transit companies. The right is normally based on rigorous rules established by the central bank. See also Recirculation. More. 17,350 machines will be installed over a six-month period with a handful of state-run banks – Bank of India, Union Bank of India, Canara Bank and India Bank – leading the way. 75% of the new devices will be cash recyclers, which, according to Indian banking authorities, will enhance operational efficiency and reduce costs.
The move has been partly caused by the collapse of Indian payments platform AGS which was declared insolvent in August 2025. AGS was one of the largest ATM service providers in India, supplying over 40,000 machines.
One of the primary drivers of India’s ATM expansion is the government’s commitment to financial inclusion. Initiatives like the Pradhan Mantri Jan Dhan Yojana (PMJDY), launched in 2014, have been pivotal in bringing millions of unbanked Indians into the formal banking system. The scheme has led to the opening of over 500 million bank accounts, each equipped with a debit card, which has directly translated into higher ATM transaction volumes. The Direct Benefit Transfer (DBT) scheme further amplifies ATM usage by enabling beneficiaries to withdraw cash subsidies and payments directly from ATMs.
The Reserve BankSee Central bank. More of India (RBI) has also played a crucial role by mandating banks to replace old ATMs with more secure, lockable cash cassettes and to increase ATM penetration in rural areas. These directives have not only bolstered the security of the ATM network but also expanded its reach, ensuring that even the most remote areas have access to banking services.
Technological advancements have successfully transformed simple cash dispensers into multifunctional banking hubs. The introduction of cash recyclingThe process of converting waste materials into new materials and objects. Banknotes are increasingly recycled after destruction, and the waste is often used for landfills, isolation material etc. Polymer notes are melted into pellets which are recycled into new products. Recycling is often incorrectly used instead of recirculation. See Recirculation. More machines (CRMs) allows ATMs to both dispense and accept cash, reducing manual handling costs and improving operational efficiency. Biometric ATMs, incorporating fingerprint and facial recognition, enhance security and user convenience, particularly in rural areas where literacy levels may be lower.
In 2023, Financial Software & Systems launched IoT and AI/ML-enabled ATMs that optimize cash managementManagement and control of cash in circulation. More and predict maintenance needs, addressing operational inefficiencies and thin profit margins. ‘Upgradable ATMs’, launched in 2024, can be converted into a CRM on demand, providing flexibility to banks.
Despite the exponential growth in digital payments—with UPI transactions surging 25-fold from 2018 to 2024—cash remains the dominant transaction medium. This preference for cash is particularly pronounced in rural and semi-urban areas, where digital infrastructure and literacy are limited. The trust in physical currencyThe money used in a particular country at a particular time, like dollar, yen, euro, etc., consisting of banknotes and coins, that does not require endorsement as a medium of exchange. More, cultural habits, and the need for tangible financial transactions sustain the demand for ATMs.
The rise in disposable incomes and consumer spending has led to increased cash withdrawals, with 48.83 crore or 488.3 million ATM withdrawals recorded in January 2025 (RBI Bulletin 2025) and average monthly withdrawal values growing by 5.51% in 2024.
White-label ATMs (WLAs), operated by non-bank entities, have been a game-changer in India’s ATM expansion. These ATMs account for roughly 30% of the total ATM base. WLAs are regulated by the RBI and have been instrumental in extending banking services to underserved regions.
The growth of off-site ATMs is constrained by high operational costs, including rentals, security, maintenance, and compliance mandates, which are significantly lower for on-site ATMs within bank premises. This cost differential has led banks to strategically consolidate their ATM footprint, focusing on fewer but more secure locations to optimize cash management and uptime.
OutsourcingTo commission a third party to conduct a part of the business, because it allows management to concentrate in the core business area. Outsourcing an activity, does not remove the responsibility for what is done on behalf and in the name of the institution and it should maintain the reputational impact of the activity intact. More ATM management to specialized service providers is emerging as a solution to reduce costs and improve efficiency. The State Bank of India (SBI) plans to outsource 40% of its on-site ATMs, covering over 10,000 devices, to focus on core banking activities while leveraging vendor expertise in cash logisticsThe term originates from military language and refers to the movement and provisioning of troops at war. In today’s business vocabulary, it refers to the management in particular, the transportation, storage and distribution of finished goods. More and maintenance.
Rural ATM penetration remains a challenge due to limited infrastructure, power supply issues, and higher deployment costs. While white-label ATM operators are expanding into semi-urban and rural markets to increase cash accessibility, the pace of growth has slowed due to these constraints. The government’s financial inclusion directives and technological innovations like micro-ATMs and biometric solutions are helping bridge this gap.
The ‘Make in India’ mandate, while promoting local manufacturing, has led to capacity bottlenecks and procurement delays among ATM vendors, affecting market growth. The RBI’s regulatory framework, including cybersecurity norms and ATM upgrade mandates, adds compliance complexity but also drives market modernization.
The Indian ATM market is projected to grow at a compound annual growth rate (CAGR) of 5.56% from FY2025 to FY2032, reaching USD 3.16 billion by 2032, up from USD 2.05 billion in FY2024. This growth will be fueled by continued government support for financial inclusion, technological innovations, and the enduring demand for cash transactions.
Technological advancements such as cash recycling machines, biometric authenticationThe process of proving that a banknote or security document is genuine. More, IoT-enabled ATMs, and cryptocurrency ATMs will enhance ATM functionality, security, and user experience. The integration of AI and machine learning will enable predictive maintenance and personalized financial services, further driving ATM relevance.
Government initiatives like PMJDY, DBT, and ‘Make in India’ will continue to shape the market, promoting self-reliance and banking penetration in underserved areas. The expansion of banking infrastructure in rural and semi-urban regions will sustain ATM demand, ensuring that cash access remains a cornerstone of financial inclusion.
Strategic partnerships between fintech companies and ATM manufacturers will accelerate the deployment of smart ATMs, while outsourcing ATM management services will improve operational efficiency and reduce costs. The ATM market’s future lies in its ability to adapt and integrate with digital banking channels, offering a hybrid model that serves diverse consumer needs.
India’s ATM boom driven by the country’s unique economic realities, government policies, and technological innovations. Despite the rapid rise of digital payments, cash remains deeply embedded in the economy, especially in rural and semi-urban regions. Government initiatives like PMJDY and DBT have significantly expanded banking access, increasing the demand for ATMs. Technological advancements such as cash recycling machines, biometric ATMs, and IoT-enabled ATMs are enhancing efficiency and security, ensuring that ATMs remain relevant in a digital-first economy.
As India’s ATM market grows faster than most global peers—what lessons does its cash-plus-tech model hold for declining ATM networks in many other markets? India’s bet on hybrid banking might just be the blueprint for inclusive resilience.