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ATM Industry Body Seeks Rs 100 Crore in Compensation from SBI

India’s ATM operators say SBI’s uneven cash supply has deepened a broader crisis in the ATM industry, where rising costs, shrinking networks, and weaker transaction revenues are putting service providers under pressure.

एटीएम संगठन ने एसबीआई से मांगा सौ करोड़ रुपये का मुआवज़ा, कहा- छोटे शहरों में नहीं दिया कैश

https://thewirehindi.com/feed · द वायर स्टाफ · 8 June 2026 · read the original in Hindi →

New Delhi: CATMi, the organization representing the ATM industry, has demanded Rs 100 crore in compensation from the country’s largest bank, SBI. It says the public-sector bank failed to keep enough cash in its ATM network, causing the industry losses.

According to a report in The Economic Times, CATMi raised the issue at a meeting with SBI and the RBI on Friday, June 5. The organization also said that a shortage of cash in ATMs located in smaller cities and towns is putting pressure on the industry.

The report, citing CATMi, said SBI is directing large amounts of cash toward ATMs in Tier-1 cities, leading to shortages in Tier-2 and Tier-3 cities and heightening the risk of large-scale ATM closures.

According to an NDTV report, last week CATMi wrote to the Indian Banks’ Association, pointing to a shortage of cash in ATM machines. The letter stressed that ATMs were receiving only 55-65 percent of the cash they required.

This is the situation even though, since 2022, once the free limit for customers is exhausted, the charge for withdrawing cash from an ATM has risen to roughly Rs 20 to Rs 28 per transaction, including 18 percent GST.

This is happening at a time when the overall availability of cash in the banking system has increased threefold. According to the NDTV report, cash availability has risen from about Rs 13 lakh crore in 2017 to more than Rs 41 lakh crore in financial year 2026, but digital transactions have diminished the importance of ATMs. In this context, the higher charge levied on ATM use, known in the banking sector as the interchange charge, has not translated into greater earnings at the ATM level.

When customers withdraw cash from an ATM or check their balance, the fee collected from them reaches service providers through the banks, so that operating costs can be met. But with the rise of digital payments and the increase in the cost of operating and maintaining ATMs, this arrangement has come under strain.

According to CATMi, if the availability of cash in ATMs comes under further pressure, they lose interchange-charge revenue. The situation has become more serious because the number of ATMs across the country is steadily declining. At the same time, banks are also finding it difficult to meet the security and service standards prescribed by the RBI for each ATM.

According to The Economic Times report, the number of ATMs in India stood at more than 253,000 in 2023-24, but fell to about 251,000 in 2024-25.

In the years after demonetization, the decline in the number of ATMs accelerated. For instance, tenders issued by Indian Railways for installing ATMs at railway stations did not draw the expected interest. ATMs are a source of revenue for the Railways, so it later tried to encourage banks to install ATMs on station premises by changing the rules.

CATMi had also said in December 2018 that rising compliance costs were putting the ATM industry under severe pressure.

The Reserve Bank of India increased the ATM transaction fee from Rs 21 to Rs 23, the upper limit, from May 2025. ATM service provider AGS Transact Technologies failed in 2025 to pay Rs 38.9 crore owed to creditors. In its letter to SBI, CATMi described this as a ‘warning’ of the crisis in the ATM industry.

The RBI said customers would continue to be entitled to five free transactions each month, both financial and non-financial, at their own bank’s ATMs. They can also make free transactions at other banks’ ATMs: three in metropolitan areas and five in non-metropolitan areas.

CATMi says that, as the largest banking company, SBI should make good the Rs 100 crore in losses.

According to a report in The Hindu, the ATM industry had raised concerns in December 2018 about compliance costs, saying they would lead to the closure of half the country’s ATMs; and in December 2021 it had also said that banks were supplying barely ‘30 percent’ of the cash required for ATMs.

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