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Indian banks are making substantial progress in aligning with the Reserve Bank of India's (RBI) directive to boost the circulation of lower denomination currency through automated teller machines. As of now, approximately 73 per cent of ATMs nationwide have been configured to dispense Rs 100 or Rs 200 notes from at least one cassette, according to The Economic Times, citing data from CMS Info Systems.

This figure reflects a marked improvement from December 2024, when 65 per cent of ATMs were configured for low-value note distribution. CMS Info Systems, India’s leading cash logistics provider, manages nearly 73,000 of the country’s 215,000 ATMs.

With 60 per cent of consumer expenditure still anchored in cash, enabling availability of Rs 100 and Rs 200 notes directly addresses day-to-day transactional needs, especially in semi-urban and rural markets, said Anush Raghavan, President – Cash Management at CMS Info Systems, as per the report.

Regulatory Milestones Set By RBI

The RBI’s circular issued in April 2025 outlines a phased approach to compliance. By September 30, 2025, at least 75 per cent of ATMs should meet the mandate. This threshold increases further by March 31, 2026, when 90 per cent of ATMs must dispense low-denomination currency to improve accessibility, particularly for everyday transactions.

ATM Interchange Fees Revised

Starting May 1, the RBI has implemented an upward revision in ATM interchange fees, impacting users who surpass the free monthly transaction quota. The updated fees are as follows:

• Cash withdrawals: Rs 19 per transaction (previously Rs 17)
• Non-financial transactions: Rs 7 per transaction (up from Rs 6)

These charges are applied by banks when a customer uses an ATM that does not belong to their home bank beyond the permitted free usage.

Free Transaction Limits And Exemptions

In metropolitan areas such as Delhi, Mumbai, Bengaluru, Kolkata, Chennai, and Hyderabad, customers are entitled to three free transactions per month at ATMs of other banks. In non-metro regions, the limit is extended to five.

The RBI also clarified that failed transactions caused by technical errors, including network issues or empty cash trays, will not be counted toward the free transaction limit and will not result in additional charges.

As the September deadline approaches, banks are accelerating upgrades to meet compliance and ensure that citizens have convenient access to smaller currency denominations essential for daily purchases.