ATM Numbers Decline in FY25 as Digital Payments Surge: RBI

India’s banking landscape is undergoing a structural shift. According to the latest RBI report, ATM numbers declined moderately in FY25, reflecting the rapid adoption of digital payment systems such as UPI, while physical bank branches continued to expand, particularly in rural and semi-urban areas.

Why in the news?

RBI report highlights a structural shift in the banking sector, with ATM numbers declining moderately in FY25 while physical bank branches continue to expand, especially in rural and semi-urban areas.

What the RBI Report Say?

The findings are part of the Reserve Bank of India publication titled Trend and Progress of Banking in India for FY25.

As per the report,

• The total number of ATMs in India fell from 2,53,417 in FY24 to 2,51,057 in FY25.
• The decline was largely driven by reduced customer reliance on cash withdrawals due to digital payments.
• The RBI clearly stated that digitization of payments has reduced the need for ATM-based transactions.

ATM Trends Across Banking Sectors

• Both public and private sector banks saw a contraction in ATM networks.
• Private sector banks reduced ATMs from 79,884 to 77,117.
• Public sector banks (PSBs) saw a decline from 1,34,694 to 1,33,544.
• The reduction was mainly due to the closure of offsite ATMs, which have become less viable with declining cash usage.

Rise of Digital Payments: The Core Reason

India’s rapid shift towards digital-first banking has transformed transaction behavior.

Key drivers include,

• Explosive growth of UPI-based payments
• Increased penetration of smartphones and internet
• Government-backed digital financial inclusion initiatives

As a result, customers increasingly prefer instant, cashless transactions over ATM visits.

White Label ATMs: An Exception

While bank-owned ATMs declined, white label ATMs (WLAs) bucked the trend.

WLAs increased from 34,602 to 36,216 in FY25.

These ATMs, operated by non-bank entities, continue to play an important role in,

• Remote and underserved areas
• Regions where bank branch presence is limited
• Bank Branches Continue to Expand
• Despite digitaliszation, banks are not retreating from physical presence.
• Total bank branches rose by 2.8%, reaching 1.64 lakh branches as of March 31, 2025.
• Expansion was driven mainly by public sector banks.

More than two-thirds of new PSB branches were opened in rural and semi-urban areas, reinforcing financial inclusion goals.

Key Takeaways

• Total ATMs declined to 2.51 lakh in FY25.
• Digital payments reduced reliance on cash transactions.
• White label ATMs increased, unlike bank-owned ATMs.
• Bank branches grew by 2.8%, led by PSBs.
• Rural and semi-urban financial inclusion remains a priority.

Question

Q. According to RBI, what was the total number of ATMs in India as of March 31, 2025?

A. 2.60 lakh
B. 2.51 lakh
C. 2.45 lakh
D. 2.70 lakh