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LoansJagat Team

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19 Jun 2025

Major Update: 73% ATMs Now Dispense ₹100 & ₹200 Notes Before RBI’s Deadline Hits

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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.


Use of Lower Denomination Currency


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?”


73% of ATMs Now Dispense ₹100 and ₹200 Notes


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.


ATM Deployment Progress

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


RBI Increases ATM Interchange Fees


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.


New vs Old ATM Interchange Fees

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.


What is the Free Transaction Policy?


Despite the hike in interchange fees, customers still enjoy free ATM withdrawals under the Free Transaction Policy. As per RBI norms:

  • Customers can make up to 5 free transactions per month from their own bank’s ATMs.

  • Additionally, they can make 3 free transactions in metro cities and 5 in non-metros from other bank ATMs.

  • Beyond the free limit, charges up to ₹21 per transaction may apply (depending on bank policies).

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.


Conclusion


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

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?

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