ATM Shutdown: ATMs in small towns and cities across India are under a massive shutdown threat. People residing in Tier 2 and Tier 3 cities may soon have to rely on banks to withdraw cash as ATMs will likely shut down due to a surprising reason.
As per a warning by Confederation of ATM Industry (CATMi), the shutdown is feared due to the current imbalance of cash distribution across the country.
Why are ATMs in smaller cities facing a crisis?
CATMi reports that a huge portion of available cash is being sent to ATMs in big metro cities, especially those run by the State Bank of India (SBI). Because of this, ATM operators say that machines in smaller towns are constantly running out of cash. This causes frequent breakdowns and fewer successful transactions, making it harder for the companies that run these machines to keep them going. Even though the ATMs are physically fine, people in these areas are having a tough time getting the cash they need.
Why are ATM operators worried?
ATM operators make their living through transaction fees. Every hour a machine sits empty or offline, they lose money. CATMi says the industry has already taken a hit of over Rs 100 crore. They've reached out to banks for help, warning that if this imbalance doesn't get fixed soon, they'll have no choice but to pull the plug on machines in areas that aren't making enough money to cover their costs.
Are fewer people using ATMs now?
While the cash distribution is the immediate crisis, it's happening alongside a bigger shift: we're just using cash less often. Thanks to the massive rise of UPI and mobile apps, monthly ATM withdrawals have plummeted from 570 million in early 2023 to around 439 million by late 2025. At the same time, the cost of keeping those machines running has spiked because of higher fuel prices and a 60% jump in minimum wages. It's essentially a "perfect storm" that's making the traditional ATM a lot harder to maintain.