India's banking landscape is undergoing a significant transformation. The latest RBI report reveals a structural shift with a moderate decline in ATM numbers during FY25, coinciding with the rapid rise of digital payment systems like UPI. While the number of ATMs has decreased, physical bank branches are expanding, particularly in rural and semi-urban areas.
The Reserve Bank of India's report underlines this structural shift in the banking sector. The findings indicate that ATM numbers have decreased moderately while the presence of physical bank branches continues to grow, especially in less urbanized regions.
The report, titled Trend and Progress of Banking in India for FY25, states that the total number of ATMs in India fell from 2,53,417 in FY24 to 2,51,057 in FY25. This decline is primarily due to a reduced reliance on cash withdrawals as digital payments gain traction.
Both public and private sector banks have experienced a contraction in their ATM networks. Private sector banks saw a reduction in ATMs from 79,884 to 77,117, while public sector banks (PSBs) decreased from 1,34,694 to 1,33,544. This drop is largely attributed to the closure of offsite ATMs, which are becoming less viable as cash usage declines.
The rapid transition towards digital-first banking has transformed customer transaction behavior. Key factors contributing to this shift include:
As a result, customers are increasingly favoring instant, cashless transactions over visiting ATMs.
Interestingly, while the number of bank-owned ATMs has decreased, white label ATMs (WLAs) have bucked this trend, increasing from 34,602 to 36,216 in FY25. Operated by non-bank entities, these ATMs remain pivotal in:
Despite the surge in digitalization, banks are not withdrawing from their physical presence. The total number of bank branches rose by 2.8%, reaching 1.64 lakh branches as of March 31, 2025. This expansion is predominantly driven by public sector banks, with more than two-thirds of new PSB branches established in rural and semi-urban areas, emphasizing the importance of financial inclusion.
Q1. What is the trend in ATM numbers in India according to the RBI report?
Answer: The RBI report indicates that ATM numbers in India declined from 2,53,417 in FY24 to 2,51,057 in FY25, reflecting a shift towards digital payments.
Q2. Why are white label ATMs increasing in number?
Answer: White label ATMs are increasing because they serve remote and underserved areas where bank branches are limited, providing essential cash access.
Q3. How much did bank branches grow in FY25?
Answer: Bank branches grew by 2.8% in FY25, reaching a total of 1.64 lakh branches, with a significant focus on rural and semi-urban areas.
Q4. What factors are driving the rise of digital payments in India?
Answer: Key factors include the explosive growth of UPI payments, increased smartphone penetration, and government initiatives aimed at digital financial inclusion.
Q5. What led to the decline in ATM usage in India?
Answer: The decline in ATM usage is primarily due to the increasing preference for digital transactions, reducing the need for cash withdrawals.
Question 1: What was the total number of ATMs in India by FY25?
A) 2,53,417
B) 2,51,057
C) 2,50,000
D) 2,55,000
Correct Answer: B
Question 2: Which bank sector saw a reduction in ATMs during FY25?
A) Public Sector Banks
B) Private Sector Banks
C) Both A and B
D) None of the above
Correct Answer: C
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