RBI Directs Banks to Ensure Regular Dispensing of ₹100 and ₹200 Notes

In a move aimed at improving accessibility to frequently used currency denominations, the Reserve Bank of India (RBI) has mandated that banks and White Label ATM Operators (WLAOs) ensure that ATMs dispense ₹100 and ₹200 denomination banknotes on a regular basis. This directive is set to roll out in phases, with specific deadlines for implementation.

Why in the news?

The RBI’s latest directive addresses a common public concern: the availability of smaller denomination notes in ATMs. By ensuring that ₹100 and ₹200 notes are available regularly, the RBI aims to make it more convenient for people to access the most commonly used denominations.

Objective

• The primary goal of this directive is to improve public access to ₹100 and ₹200 notes. These denominations are frequently used for everyday transactions, and the RBI wants to ensure that they are available in sufficient quantities across ATMs.

Timeline for Implementation

• By September 30, 2025: 75% of all ATMs in India should be capable of dispensing either ₹100 or ₹200 denomination notes from at least one cassette.
• By March 31, 2026: This figure is set to increase to 90%, meaning 90% of ATMs should regularly dispense ₹100 or ₹200 denomination notes from at least one cassette.

Targeting High-Demand Denominations

• ₹100 and ₹200 notes are among the most commonly used denominations in India. By making them widely available through ATMs, the RBI is addressing a key issue of currency accessibility, especially in areas where people depend on ATMs for quick withdrawals.

Enhanced Public Convenience

• This move is expected to alleviate the public’s frustration with the lack of smaller denominations in ATMs. People often face difficulties when receiving ₹500 or ₹2,000 notes, which are not as easily accepted for smaller transactions, leading to inconvenience and a reliance on currency exchanges.

Impact on ATM Operators

• Banks and WLAOs will need to make adjustments to their ATM systems to accommodate the dispensing of ₹100 and ₹200 notes. This will require modifications to cassette systems and perhaps additional investments in infrastructure to meet the RBI’s deadlines.

Public Accessibility and Financial Inclusion

• By ensuring these denominations are readily available, the RBI also promotes greater financial inclusion. This is particularly beneficial for lower-income groups and in rural areas where people may rely more on ATMs for their cash needs.