A trip to the ATM often leaves you with few options. Need to withdraw cash? Your choices are restricted to Rs 500, Rs 1,000, Rs 2,000 and other high denominations. Need a change? Visit your vegetable vendor if he is generous enough to oblige you. Or hand over a Rs 100 note to your autorickshaw driver who, in most cases, will frown at your insensitivity.
“Change nahin hai kya?” is their standard refrain.
This scenario is about to change.
The government is exploring multiple measures to increase circulation of small-denomination currency notes.
The proposed steps include new ATMs capable of dispensing Rs 10, Rs 20, and Rs 50 notes.
Hybrid machines should be able to exchange large notes for smaller denominations. It should also be a potential push for the Reserve Bank of India to print more low-value notes.
It could be argued that when digital payments have become so widespread, what is the need for this push?
It must be acknowledged that many semi-urban and rural areas in India still rely heavily on cash. Moreover, smartphone penetration is not universal. UPI connectivity can be patchy. Everyday transactions often involve small sums that require exact change. Using UPI for a Rs 25 payment is too much of a stretch.
According to media reports, a pilot project testing a prototype of low-denomination dispensing machines is underway in Mumbai. If approved, the project is expected to be expanded nationally, with hybrid ATMs installed at high-footfall public areas such as transport hubs, markets, hospitals, and government offices.
Devendra Pant, chief economist at India Ratings & Research, was quoted as saying that in rural interiors, traders typically handle low-volume and low-value transactions daily, and that improving currency access is a government responsibility.
However, challenges remain. As reports observed, hybrid ATMs alone cannot resolve the shortage unless supported by sufficient printing, logistics, and recirculation of smaller notes.
Additionally, financial services experts cautioned that a large-scale rollout may be uneconomical for banks. They believe the machines should be deployed selectively, in areas where digital infrastructure is still developing, to balance currency availability with digital payment adoption.
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