ATM Body Seeks Rs.100 Crore Compensation from SBI Over Cash Shortages in Small-Town ATMs
The Confederation of ATM Industry (CATMi) has demanded ₹100 crore as compensation from State Bank of India (SBI). The industry body claims that SBI has not supplied enough cash to ATM networks, causing financial losses to ATM operators.
According to a report by The Economic Times, CATMi raised the issue during a meeting held on June 5 with SBI and the Reserve Bank of India (RBI). The association said that ATM operators are facing serious difficulties due to cash shortages, especially in small towns.
CATMi alleged that SBI is sending a larger share of cash to ATMs in Tier-1 cities, resulting in cash shortages at ATMs located in Tier-2 and Tier-3 cities. The association warned that this situation could lead to widespread ATM shutdowns.
Last week, CATMi also wrote to the Indian Banks’ Association (IBA), highlighting the cash shortage problem. The association claimed that many ATMs are receiving only 55% to 65% of the cash they require.
Interestingly, the shortage exists despite a sharp increase in the amount of cash available in the banking system. According to reports, cash availability has increased from about ₹13 lakh crore in FY17 to more than ₹41 lakh crore in FY26.
There is a growing concern that if Banks are charging fees from customers for ATM usage, then why such issues are occurring?
Customers are paying ATM transaction charges of around ₹20 to ₹28 per transaction, including GST, after they exhaust their free transaction limits. However, the growing use of digital payments has reduced ATM usage. As a result, higher ATM charges have not translated into higher income for ATM operators.
The fees paid by customers for cash withdrawals and balance enquiries are shared through banks with ATM service providers to cover operating costs. But ATM operators say they are under pressure because operating expenses are rising while ATM usage is declining.
CATMi said that when ATMs run out of cash, operators lose interchange revenue, which is an important source of income.
The industry is also facing challenges due to a decline in the number of ATMs across the country.
According to reports, the number of ATMs in India fell to around 2.51 lakh in 2024-25, compared to more than 2.53 lakh a year earlier. The decline in ATM numbers has continued since the years following demonetisation.
CATMi also pointed to the financial troubles of AGS Transact Technologies, which reportedly defaulted on debt repayments of ₹389 million in 2025. The association described this as a warning sign for the ATM industry.
