Having onsite automated teller machines (ATMs) and Cash Recyler Machines (CRMs) seems to be the preferred option for banks, going by the trend in deployment of these machines in the last five years.

Banks deployed 18,389 ATMs and CRMs onsite (branch premises) in the last five years up to April-end 2025 even as the number of these machines offsite de-grew 14,973, per RBI data.

As at April-end 2025, the number of onsite and offsite ATMs and CRMs stood at 1,31,265 (1,12,876 as at April-end 2020) and 82,526 (97,319), respectively.

Expectation that RBI would exempt onsite ATMs and CRMs from the requirement of replenishing them with cash through the cassette mode and pick up in digital banking via mobile and internet reducing the requirement for offsite branding and visibility may have prompted banks to step up onsite deployments, say experts.

Mani Mamallan, Founder, Chairman & Managing Director, Electronic Payment and Services Pvt Ltd, said: “A couple of decades back when Banks started deploying off-site ATMs, the primary reason was for branding and visibility purposes....to showcase that ‘we are a big bank, we are present in so many places’.”

“Right now, with digital banking, including mobile banking, striking deep roots and UPI becoming the primary mode for retail transactions, I think, most of the banks would rather push their branding or marketing information on the customer’s mobile phone itself. So, banks don’t need to position themselves off-site for branding or visibility purposes.”

So, white label ATM operators (ATMs set up, owned and operated by non-banks) will move into the offsite space vacated by Banks.

Cassette swap mechanism

Last year, RBI gave banks and ATM operators some wiggle room for implementing the cassette swap mechanism for cash replenishment in ATMs.

The banking regulator exempted CRMs from the cassette swap requirement for cash replenishment. Additionally, this exemption applies when banks don’t engage outsourced agencies for cash replenishment in ATMs.

To increase the viability of the ATM business and increase their deployment, the RBI allowed an increase the maximum amount a bank can charge its customers for transactions beyond the mandatory free transactions from ₹21 to ₹23 per transaction. This was announced in early April 2025.

ATM interchange fee

The aforementioned increase came in the backdrop of the National Payments Corporation of India (NPCI) recently upping the ATM interchange fee (paid by a bank when its customer uses another bank’s ATM) from ₹17 to ₹19 for financial transactions and ₹6 to ₹7 per transaction.

The increase in ATM interchange fees and customer charges have been implemented from May 1, 2025.

Published on June 18, 2025