Karnataka Saw Highest Cash Replenishment in ATMs During 2022-23, Says Report

Cash withdrawal from ATMs using debit cards across India jumped 235% to Rs 2.85 lakh crore in March 2023, compared to Rs 84,934 crore in December 2016, says a report by banking logistics services provider CMS Info Systems.

The CMS India Cash Vibrancy Report 2023 says December 2016 recorded the lowest monthly ATM cash withdrawal using debit cards following the demonetisation of Rs 500 and Rs 1,000 currency notes in the previous month.

In 2023, ATMs in Karnataka have seen the highest average cash replenishment per ATM at Rs.1.73 crore, which was 18.14% higher than the average Rs 1.46 crore cash replenished per ATM during FY 2022.

In terms of highest annual growth in average ATM cash replenishment per ATM, Delhi, Karnataka, Tamil Nadu, Kerala and Maharashtra saw a growth of 23.78%, 18.14%, 15.77%, 14.67% and 13.69%, respectively in the previous financial year.

Maharashtra, Tamil Nadu, Gujarat, Karnataka and Uttar Pradesh are the top five states with the maximum GSDP. Together, these states accounted for 43.10% of the ATM cash replenished during 2022-23.

According to RBI data, cash withdrawal at ATMs stood at Rs 2.86 lakh crore in March. Of this, Rs 396 crore was withdrawn using credit cards and Rs 1,411 crore was withdrawn using prepaid cards. For the fiscal year 2022-23, the value of ATM cash withdrawals stood at Rs 33.04 lakh crore.

“After demonetisation, Currency In Circulation (CIC) had witnessed a monthly decline of 33.14% from Rs 17.78 lakh crore in October 2016 to Rs 1.88 lakh crore in November 2016. In the post-demonetisation era, the lowest CIC was recorded at Rs 9.43 lakh crore in December 2016, and Rs 33.80 lakh crore in March 2023, an increase of over 3.58 times, or 258.39% on an absolute basis in a matter of 76 months,” says the report.

The report illustrates the strong demand for cash-based transactions in India — from ATM cash withdrawal patterns across metropolitan, semi-metropolitan, semi-urban, and rural centres to sector-level analysis of business activity through retail cash management data.

“The report demonstrates the relevance and importance of cash in the Indian economy. It is critical to widen financial inclusion and provide a convenient and low-cost payment system which is accessible to everyone in the society. We have seen 10.1% growth in monthly average cash replenishment at ATMs in FY23,” says the report.

“It is noteworthy that a significant portion of the population in India is unbanked, with no access to formal banking services. These individuals rely on cash usage every day as their primary means of conducting transactions. Under penetration of financial and digital literacy further leads to security concerns for digital payments despite the convenience offered. The correct balance of cash and digital payments will lead a booming economy like India’s to an upward trajectory,” said the report.