From Cash to Clicks: Why is India Using Fewer ATMs Despite the Availability of Bank Branches?

India’s banking habits are changing rapidly. Cash withdrawals through ATMs are slowly declining, even as banks continue to open new branches across the country. Data from the Reserve Bank of India’s Trend and Progress of Banking in India report for FY25 highlights how digital payments are reshaping the way people access financial services.

ATM Numbers Fall as Digital Payments Rise

The total number of ATMs in India declined to 2,51,057 as of March 31, 2025, compared with 2,53,417 a year earlier. While the fall is not sharp, it reflects a steady shift away from cash-based transactions.

With UPI, mobile banking apps, and digital wallets becoming part of daily life, customers are visiting ATMs less frequently for routine needs. Payments, transfers, and even small purchases are increasingly handled through smartphones, reducing the demand for physical cash withdrawals.

Banks Shut Off-Site ATMs

Both public and private sector banks reduced their ATM networks during the year. Private banks saw the largest cut, with ATM numbers falling to 77,117 in FY25 from 79,884 in FY24. Public sector banks, which still operate the biggest ATM network, reduced their count to 1,33,544 from 1,34,694.

Much of this consolidation came from shutting down off-site ATMs, which saw lower usage as customers moved to digital channels.

In contrast, white-label ATMs, operated by independent firms, continued to grow. Their numbers rose to 36,216 from 34,602, showing that cash access is still needed in select locations where bank presence is limited.

Urban Focus Remains for Private Banks

The RBI noted a clear difference in ATM placement strategies. Public sector banks maintained a more balanced presence across urban, semi-urban, and rural areas. However, private and foreign banks continued to focus their ATM networks mainly in urban and metropolitan centres, where digital adoption is already high.

Bank Branches Continue to Expand

Despite the digital shift, banks are not stepping away from physical branches. The total number of bank branches rose to 1.64 lakh as of March 31, 2025, marking 2.8 per cent growth over the previous year.

Public sector banks led this expansion, with over two-thirds of their new branches opened in rural and semi-urban areas. This highlights the continued importance of branches for financial inclusion, customer onboarding, and access to services beyond digital platforms.

Jan Dhan Accounts and Deposit Coverage

Basic savings bank deposit accounts under the Jan Dhan framework grew 2.6% to 72.4 crore in FY25. The total balance in these accounts rose faster, increasing 9.5% to ₹3.3 lakh crore. Most of these accounts continue to be operated through business correspondents, helping extend banking services to remote areas.

Deposit insurance coverage remained high at 97.6% of accounts, though the share of insured deposit value declined slightly.

Conclusion

India’s move from cash to clicks is clear. While ATM usage is gradually falling due to digital payments, bank branches are still expanding to support inclusion and trust-based banking. The future of banking in India appears to be a mix of digital convenience and physical reach.

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