Author
LoansJagat Team
Read Time
4 Min
19 Jun 2025
Until last year, most housewives were asking the vendors if they had a change of ₹500 notes. Remember?
It was not possible to do minute monetary dealings with big bills like a ₹500 note. Recognising this, the Reserve Bank of India (RBI) issued a circular in April 2024 directing banks to ensure a sufficient supply of ₹100 and ₹200 notes through ATMs.
The aim was to make daily transactions smoother for the average Indian and to improve access to lower denomination currency across both urban and rural areas. Now, with the September 30, 2025, deadline nearing, a significant shift is visible in ATM operations.
For a large portion of India's population—especially the middle- and lower-income groups—daily cash transactions are a normal thing. According to a Frost and Sullivan Report, around 60% of all household spending in India is still done through cash.
Denominations of ₹100 and ₹200 are preferred for groceries, transport, utilities, and other small expenses. Without access to smaller notes, individuals often face difficulty in obtaining change for higher denominations like ₹500.
Refer to this table to understand why small currency notes are crucial for daily life:
User Group | Spending Pattern | Need for ₹100/₹200 Notes |
Middle-Class Households | Daily grocery, school fees, fuel | Easy for exact payments without needing change |
Street Vendors & Retailers | High-volume, low-ticket transactions | Helps in giving and receiving exact change |
Senior Citizens | Prefer cash over digital methods | Simpler transactions using small denomination notes |
Rural Households | Cash-dependent economies | Better suited for local market transactions |
However, now you don’t have to ask, “Chutta hai kya bhaiya?”
There’s been a major jump in the availability of lower denomination notes via ATMs. In December 2024, only 65% of ATMs were able to dispense ₹100 and ₹200 notes. However, as per the RBI directive and with increasing demand from the public, this number has now risen to 73% as of June 2025.
Banks have been reconfiguring their ATM cassettes to meet the deadline. Public sector banks, in particular, have made significant improvements, ensuring accessibility even in Tier-3 and Tier-4 cities.
Private banks are catching up with major upgrades underway.
Month | % of ATMs Dispensing ₹100/₹200 Notes |
December 2024 | 65% |
March 2025 | 69% |
June 2025 | 73% |
RBI Target | 75% by September 30, 2025 |
Final Target | 90% by March 2026 |
To facilitate banks in maintaining and upgrading ATMs for low denomination availability, the RBI has revised the ATM interchange fee structure effective from May 1, 2025.
The interchange fee is the amount paid by the card-issuing bank to the ATM-operating bank when a customer withdraws money from another bank’s ATM.
Transaction Type | Previous Fee | Revised Fee (from May 1, 2025) |
Financial Transaction | ₹17 | ₹21 |
Non-Financial Transaction | ₹6 | ₹8 |
This fee hike is aimed at incentivising banks to maintain high-quality ATM infrastructure and ensure wider geographical coverage, especially for dispensing smaller notes.
Despite the hike in interchange fees, customers still enjoy free ATM withdrawals under the Free Transaction Policy. As per RBI norms:
This policy ensures that the average consumer still benefits from cost-effective access to cash, while banks balance the operational costs through the revised fee model.
With 73% of ATMs now equipped to dispense ₹100 and ₹200 notes, India is moving closer to a more inclusive and convenient cash management system. The RBI’s proactive measures—ranging from pushing banks to recalibrate ATMs to adjusting interchange fees—highlight its commitment to financial accessibility for all.
As the September 30 deadline nears, consumers can expect smoother cash transactions, especially in semi-urban and rural areas, where small change often makes a big difference.
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LoansJagat Team
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