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₹500 Notes Not Being Phased Out: Government Clarifies ATM Rules

Written by: Aayushi ChaubeyUpdated on: 8 Aug 2025, 7:17 pm IST
The government has clarified there’s no plan to stop ₹500 notes, while steps are being taken to improve ATM access to smaller denominations.
₹500 Notes Not Being Phased Out: Government Clarifies ATM Rules
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The Ministry of Finance has confirmed that there is no plan to ban or stop the use of ₹500 notes in the country. This clarification comes after several media reports and public concerns that ₹500 notes might be removed from circulation or stopped from being dispensed through ATMs.

In a written reply to the Rajya Sabha on August 5, 2025, the government said the Reserve Bank of India (RBI) continues to maintain a balanced mix of currency denominations to meet the needs of the public.

Focus on Smaller Denomination Notes

Although ₹500 notes will continue to be available, the RBI has directed banks and White Label ATM Operators (WLAOs) to ensure better access to ₹100 and ₹200 notes through ATMs.

As per the RBI’s circular dated April 28, 2025:

  • By September 30, 2025, at least 75% of ATMs must dispense Rs 100 or Rs 200 notes from at least one cassette.
  • By March 31, 2026, this requirement will increase to 90% of all ATMs.

This move is aimed at improving access to smaller denomination notes for daily transactions, especially in rural and semi-urban areas.

Government’s Response in Parliament

In response to questions raised by MPs Yerram Venkata Subba Reddy and Milind Murali Deora, the Ministry clearly stated:

  • There is no proposal to stop the supply or ATM distribution of ₹500 notes.
  • The printing of currency notes is decided by the Government of India and the RBI based on public demand.
  • ₹500 notes will continue to be dispensed alongside ₹100 and ₹200 notes.

Impact on Public and Banking Services

This initiative will not replace or reduce the importance of ₹500 notes but simply ensures better access to smaller notes that are commonly used for small purchases.

For those using ATMs regularly, this change will make it easier to get change, especially in places where ₹500 notes are hard to break.

Meanwhile, many banks have also encouraged customers to explore digital payments and online banking services, such as demat accounts, UPI, and mobile banking apps for convenience and better money management.

Read more: Ladli Behna Yojana: Madhya Pradesh Govt Transfers ₹1,859 Crore to Women for Raksha Bandhan.

Conclusion

To sum up, the ₹500 currency notes are not being phased out. The RBI is only working towards improving access to smaller notes to make cash transactions easier for everyone. The government has clearly stated there’s no proposal to stop Rs 500 note supply or usage.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Published on: Aug 8, 2025, 1:43 PM IST

Aayushi Chaubey

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