Banks increase ATMs: Strategy shifts due to digital payments and rising costs

Banks are focusing on ATMs in smaller towns and rural areas. Bank officials say that revenue from urban ATMs is lower compared to their costs. Rent for a 6×8 square feet ATM space can go up to ₹40,000.

Cities like Mumbai, monthly maintenance expenses can reach ₹1 lakh. Additionally, limits on free withdrawals and restrictions on interchange fees have reduced margins. Currently, there are 15 ATMs for every 1 lakh people. Of these, 80% are in urban areas, while 67% of the population lives in rural regions.

According to RBI data, the number of ATMs in the country peaked at 216,000 in 2022-23 before declining to 211,000 in 2024-25. In contrast, the number of bank branches has increased to 142,000.

Installing ATMs in villages can be expensive. Despite this, bankers believe that ATMs in cities are proving to be loss-making ventures, so it's better to focus on rural areas.

Cash withdrawals from ATMs

Easy access to cash for local population Cost reduction through micro, mobile ATMs. Cash withdrawals from ATMs have been declining for three years