From Sept 30, 75% ATMs to dispense ₹100/₹200 notes from at least one cassette; ₹500 notes to continue: Govt

The government is not planning to stop the circulation of ₹500 denomination banknotes, and is not prioritising lower denominations either.

In a written reply in Lok Sabha on August 5, 2025, Minister of State (Finance) Pankaj Chaudhary said, “There is no proposal to stop the supply of ₹500 denomination banknotes, and ATMs will continue disbursing ₹500 alongside ₹100/₹200.”

“The printing of banknotes of a particular denomination is decided by the Government of India in consultation with the Reserve Bank of India (RBI) to maintain the desired denomination mix for facilitating transactional demand of the public,” the reply stated.

However, to improve public access to frequently used denominations, the RBI has directed banks and White Label ATM Operators (WLAOs) to ensure that their ATMs dispense ₹100 and ₹200 denomination banknotes on a regular basis.

“RBI has informed that as part of their endeavour to enhance public access to frequently used denominations of banknotes, a circular titled ‘Dispensation of ₹100 and ₹200 Denomination Banknotes through ATMs’ has been issued on April 28, 2025, directing all banks and White Label ATM Operators (WLAOs) to ensure that their ATMs dispense ₹100 and ₹200 denomination banknotes on a regular basis…” the reply noted.

Starting from September 30, 2025, 75% of all ATMs shall dispense either ₹100 or ₹200 denomination banknotes from at least one cassette, the government said.

Further, from March 31, 2026, 90% of all ATMs shall dispense ₹100 or ₹200 notes from at least one cassette, it added.

What is a cassette?

For ATMs, a cassette is a removable storage unit that holds banknotes of a specific denomination. Usually, ATMs have multiple cassettes, like one might have a stack of ₹100 notes, and another might have ₹500 notes, etc. So, a cassette in this case is a kind of money cartridge.

Availability of lower denominations

The aim of the RBI’s mandate is to increase public access to smaller denominations, as many ATMs prioritise ₹500 notes, which makes small purchases inconvenient for users. This move is expected to improve financial inclusion, especially in semi-urban and rural areas.

Banks have already started increasing the availability of lower denominations in their ATMs ahead of the September 30 deadline.

As per a report by the Economic Times published in June, 73% ATMs are now ready to dispense ₹100 or ₹200 notes from at least one cassette.

After the RBI’s notice, many believed that this was being done to stop the dispensation of ₹500 notes, but the government has clarified that the supply of ₹500 denomination banknotes will continue, and they remain legal tender.