Having an ATM right inside a bank branch is becoming the go-to strategy for Indian banks, judging by the way these machines have been deployed over the last five years.
While more ATMs and Cash Recycler Machines (CRMs) have popped up inside branches, the number of offsite machines, the ones you'd usually find at shopping centres, petrol pumps or standalone kiosks, is quietly shrinking.
Between April 2020 and April 2025, banks added 18,389 onsite ATMs and CRMs to their network, according to Reserve Bank of India data. During the same period, 14,973 offsite machines were pulled back. As of April-end 2025, the number of onsite machines stood at 1,31,265, up from 1,12,876 five years ago. In contrast, offsite machines dropped to 82,526, down from 97,319.
Experts feel this shift is partly influenced by the RBI’s anticipated move to ease the rules around cash loading in onsite machines. Currently, banks are required to refill ATMs using a cassette swap mechanism – a strict protocol meant to prevent tampering and enhance security. But insiders believe onsite machines could be spared from this, especially if banks don’t use outsourced cash handling agencies. That alone would bring down operational headaches and costs.
Then there's the digital angle. Mobile banking and UPI have transformed the way we pay. With customers now doing everything from bill payments to instant transfers on their phones, the need for physical ATMs – especially for visibility and brand presence – is waning.
The offsite space that banks are exiting could soon be filled by white label ATM operators – companies that are not banks but are licensed to run ATMs. These players have been trying to build a viable business, and the opening up of prime offsite locations may give them a fresh shot.
Back in 2024, the RBI gave a bit of relief to banks and ATM operators when it allowed some flexibility in implementing the cassette swap system. CRMs – the machines that accept deposits and dispense cash – were fully exempted. Plus, if a bank was managing ATM cash loading without outsourced vendors, they could skip the cassette rule even for regular ATMs. That may have encouraged banks to consolidate ATM operations within branch premises
To help banks recover operational costs and make the ATM business more sustainable, the RBI also allowed them to charge customers a bit more. Starting from May 1, 2025, the fee for using an ATM beyond the free monthly limit has gone up from ₹21 to ₹23 per transaction.
Adding to this, the National Payments Corporation of India recently hiked the interchange fee – the amount paid by one bank to another when a customer uses an ATM outside their bank’s network.
Financial transactions now carry a ₹19 interchange fee (up from ₹17), and non-financial ones like checking balance cost ₹7 (up from ₹6).