The Reserve Bank of India (RBI) has announced an important change that will make withdrawing small denomination currency notes easier for everyone. In a new circular (RBI/2025-26/33, dated April 28, 2025), RBI has instructed all banks and White Label ATM Operators (WLAOs) to ensure that their ATMs regularly dispense ₹100 and ₹200 denomination banknotes.
This step has been taken to improve the availability of frequently used notes and make cash transactions more convenient for the general public. Let’s understand what this new RBI rule means, the timeline for implementation, and its impact on everyday life.
What Is the New RBI Rule About?
According to the circular, RBI has directed all banks and White Label ATM operators to make sure that at least one cassette in each ATM dispenses either ₹100 or ₹200 denomination notes.
The goal is to ensure that people across cities, towns, and rural areas have easy access to smaller denomination notes, which are often in short supply.
Implementation Deadlines Announced by RBI
RBI has provided clear milestones to banks and ATM operators for implementing this new rule in two phases:
- By September 30, 2025:
- At least 75% of all ATMs must dispense either ₹100 or ₹200 denomination notes from at least one cassette.
- At least 75% of all ATMs must dispense either ₹100 or ₹200 denomination notes from at least one cassette.
- By March 31, 2026:
- This figure must increase to 90% of all ATMs nationwide.
- This figure must increase to 90% of all ATMs nationwide.
This means that within a year, almost all ATMs in the country will provide ₹100 and ₹200 notes regularly.
Why Did RBI Introduce This Rule?
The main objective of RBI’s decision is to enhance public convenience and make smaller denomination currency easily accessible.
Many people often face difficulties when ATMs dispense only ₹500 notes. This creates problems in small transactions—like paying for auto rides, groceries, or local vendors—where change is needed.
With this new rule, RBI aims to solve that issue and ensure that every person can easily get smaller notes without depending on shopkeepers or others for change.
Key Benefits of RBI’s New ATM Rule
RBI’s decision will bring several benefits to both the general public and the banking system.
1. Easier Daily Transactions
Small payments such as transport fares, snacks, groceries, or local purchases will become more convenient with easy access to ₹100 and ₹200 notes.
2. Relief for Rural and Semi-Urban Areas
In small towns and villages, ATMs often dispense only ₹500 notes. The new rule will ensure that people in these areas also get smaller denominations easily.
3. Balanced Cash and Digital Payments
Although digital payments are growing fast, cash is still widely used in India. Ensuring the availability of smaller notes helps maintain a balance between digital and cash-based transactions.
4. Reduces Change Shortage
Shopkeepers, vendors, and customers frequently face a shortage of change. This move will help reduce that issue significantly.
What Are Banks and ATM Operators Required to Do?
RBI has made it mandatory for all banks and White Label ATM Operators to take necessary steps to comply with this directive.
They will have to:
- Reconfigure their ATMs to include at least one cassette with ₹100 or ₹200 notes.
- Monitor ATM operations to ensure regular replenishment of small denomination notes.
- Coordinate with their cash management service providers to meet the deadlines.
This may involve some technical and logistical changes, but it will ultimately benefit millions of customers.
Who Are White Label ATM Operators (WLAOs)?
White Label ATMs (WLAs) are ATMs set up and operated by private companies, not banks. These companies operate under RBI authorization and provide ATM services in areas where banks may not have a strong presence.
Examples of White Label ATM providers include Tata Indicash, Hitachi Money Spot, and Muthoot ATM.
RBI’s directive applies to them as well, ensuring that even remote or semi-urban areas where WLAs are common will have ₹100 and ₹200 notes available.
What Does This Mean for the Common Man?
For everyday users, this rule means more convenience and flexibility.
From now on, when you withdraw cash from an ATM, you are more likely to get a mix of ₹100, ₹200, and ₹500 notes—rather than just higher denominations.
This will make it easier to manage daily expenses, especially for those who prefer cash over digital payments.
What Is an ATM Cassette?
Inside every ATM machine, there are multiple cassettes—compartments that hold currency notes of different denominations.
For example:
- One cassette may hold ₹500 notes,
- Another may hold ₹200 notes, and
- Another may hold ₹100 notes.
RBI has now made it mandatory that at least one cassette in every ATM must contain either ₹100 or ₹200 notes. This ensures small notes are always available.
How This Will Benefit the Economy
This initiative will not only help the general public but also contribute to a better currency circulation system in the country.
By ensuring the steady availability of lower denominations, RBI is strengthening the overall cash management system and improving efficiency in cash distribution across India.
Moreover, it reduces the dependency on higher-value notes, which will help balance liquidity and cash demand in the economy.
Conclusion
RBI’s new circular is a citizen-friendly decision aimed at making cash withdrawals more convenient for everyone.
By September 2025, 75% of ATMs will start dispensing ₹100 or ₹200 notes, and by March 2026, this will expand to 90%.
This move will eliminate the shortage of small notes, ease daily transactions, and make the banking experience smoother and more user-friendly.
The RBI continues to take steps that ensure cash accessibility remains efficient and inclusive—this latest directive is yet another example of that commitment.