Why are ATMs running dry in smaller cities? RBI reviews cash shortage

New Delhil: The Reserve Bank of India has begun reviewing cash availability across bank branches and ATM networks after recurring complaints of dry ATMs in several parts of the country over the past three months. The central bank has sought details of cash inventories maintained by banks to assess whether lenders are keeping enough deployable cash for timely ATM replenishment. The review follows shortages in tier-II and smaller cities, including complaints from State Bank of India customers.. The RBI is expected to take a strict view if banks are found to have failed in maintaining adequate ATM cash availability. The issue has also affected cash management companies, which reported business losses when machines could not be replenished because banks had not supplied enough cash. Bankers said branch inventory figures can be misleading because they include soiled and unfit notes that cannot immediately be loaded into ATMs. This means the cash actually available for ATM use may be lower than reported stock levels. The Confederation of ATM Industry had flagged the issue with lenders in June, urging banks through the Indian Banks’ Association to ensure adequate cash for replenishment. The industry body said ATM cash fulfilment levels were between 57 percent and 64 percent during April and May, leaving a large share of demand unmet. Karnataka, Andhra Pradesh and Telangana recorded the highest incidence of dry ATMs during the period. The RBI and SBI had not responded to queries at the time of publication. The immediate regulatory focus is now on whether banks’ reported inventories match the usable cash needed to keep ATM networks functional.