In one of our earlier stories in 2019, it was observed that the number of ATMs deployed across the country remained largely stagnant for about two years. The latest data from the RBI indicates that while the number of ATMs across the country decreased slightly during 2020, the number has significantly increased by the end of 2021.
The COVID-19 pandemic affected various walks of life. The mode of financial transactions by the general public in view of the lockdown measures and social distancing norms are among those that saw a sea change. In an earlier story, we highlighted that lockdown measures had a significant influence on Digital Transactions.
On the other hand, ATMs are a key indicator to assess the mode of transactions, especially with respect to cash. The overheads involved in maintaining ATMs and their utilization are important factors in a bank’s decisions to continue, close, or even set up a new ATM. The trend in the number of ATMs across types, and regions provides important insights on this issue.
In an earlier story on ATMs, we had highlighted that as of the first quarter of 2019, while the total number of ATMs has largely remained stagnant, there was a marked decrease in the number of ATMs of Public sector banks. In this story, we look at the trend in the number of ATMs since 2019 to ascertain any possible impact of the pandemic on the ATMs.
Number of ATMs increases during 2021, after a fall during 2020.
We had earlier observed there was a slight increase in the number of ATMs during the first quarter of 2019, as against the declining trend observed in the earlier quarters.
This increase is observed all through 2019, when the number of ATMs deployed across the country increased from 2.21 lakhs by end of March 2019 to 2.32 lakhs by end of December 2019. The increasing trend continued that by March 2021, the total number of ATMs deployed in the country was 2.34 lakhs.
However, the onset of the first wave of the pandemic had a marginal effect with the quarter ending June 2020 reporting 90 fewer ATMs than the previous quarter. However, a major fall in the number of ATMs was during the last quarter of 2020 with 1,178 fewer ATMs.
The trend reversed in 2021 when there is a quarter-on-quarter increase in the number of ATMs deployed. The increase has been higher, especially during the first quarter and the fourth quarter of the year. Overall, 16.3 thousand additional ATMs were deployed during the year i.e an increase of 7% in a year.
Increase in the number of ATMs deployed across all Bank Types, with increase in White Label ATMs being more prominent
The increase in the number of ATMs in 2021 is observed across most of the Bank Types.
- We had earlier highlighted that there is a declining trend in the number of Public Sector Bank ATMs. The trends fluctuated during 2019 and 2020 with a more noticeable fall during the last quarter of 2020. However, in 2021, the number of ATMs of Public Sector Banks has increased. By the end of 2020, there were 1.32 lakh ATMs of public sector banks, which increased to 1.39 lakhs by end of 2021.
- In the case of Private sector Bank ATMs, there is a significant growth during 2019. By the end of March 2019, there were 63.3 thousand ATMs, which increased to 72.9 by the end of the year. During the pandemic year of 2020, the number of ATMs deployed was largely not affected, which continued even in 2021, with an increase in the last quarter of 2021.
- In the case of foreign banks, there has been a declining trend for the most part of 2019-21. However, in the last quarter of 2021, there has been an exponential increase in the number of Foreign Bank ATMs, with the number increasing from 829 to 1795. But this growth is largely attributed to the increase in the number of ATMs deployed by DBS, which added nearly 1000 ATMs in the last quarter.
- Earlier, we had highlighted the consistent growth in the White Label ATMs. The growth continued even during 2019-21. By the end of March 2019, there were 19.5 thousand White Label ATMs, which increased to 29.9 thousand by the end of December 2021. There has been an increase in every quarter, even during 2020.
The number of ATMs of Small Finance Banks, even though fewer in number has increased, especially after the first wave of the COVID-19 pandemic.
The overall increase in the number of ATMs during the last quarter of 2021, can also be attributed to the inclusion of ATMs of Co-operative banks (State, Urban, District-Central) along with those of Regional Rural Banks in the data released by RBI.
Meanwhile, after an increase in the number of ATMs of Payment Banks during the first half of 2021 (130), there is a fall by the end of the year to reach 66.
No major variation in the trends among the regions
The RBI data categorizes the ATMs deployed across the country into four regions – Metro, Urban, Semi-Urban & Rural.
The trends since 2019, do not show any marked difference between the regions. The generic trend across the regions conforms to the overall trend i.e., a drop in the number of ATMs during 2020 with an increase in 2021.
- In the Metro centres, there is a fall in the number of ATMs during the last three quarters of 2020 after the onset of the pandemic. The number of ATMs fell from 62.4 thousand at the end of March 2020 to 60.83 thousand by the end of year. The number of ATMs deployed in Metros, however, showed an increasing trend in 2021, with a significant increase during the last quarter of 2021, with an increase of around 5 thousand ATMs, with SBI being the major contributor.
- The last quarter of 2021 shows a contrast for the Urban Centres. The number of ATMs fell from 64.2 thousand by end of September 2021 to 61.2 thousand by the end of December 2021. This fall can be largely attributed to the State Bank of India. The number of ATMs deployed during the period fell from 22.5 thousand to 17.5 thousand. Meanwhile, there is an increase in the White Label ATMs in Urban Centres during this period.
- In the case of Semi-Urban Centres, after a marginal fall in the number of ATMs deployed during the last three quarters of 2020, there is an increasing trend in 2021.
- In the case of Rural Centres, there is an increase in the number of ATMs immediately after the onset of the pandemic. However, there is a fall in the number of ATMs deployed during the last quarter of 2020. The increasing trend in 2021 was more prominent during the last quarter of 2021. As in the case of Metros, the increase can be attributed largely to SBI increasing the number of its ATMs.
Increase in the total number of ATMs deployed across India during 2021
As the data indicates, there has been an increase in the total number of ATMs deployed across the country in 2021 despite a fall during the last three quarters of 2020.
Barring a few exceptions highlighted above, this trend is more or less similar across the different types of banks as well as regions.
Unlike the trend observed prior to 2019, there has been an increase in the number of Public Sector bank ATMs. SBI, the largest Public Sector Bank in the country has increased in the number of its ATMs across the country.
Another significant observation is the continuing trend of increase in the White Label ATMs. This increase is observed across the country. Though the increase is observed across states, the largest number of White Label ATMs are in Uttar Pradesh, Tamil Nadu, Maharashtra & Bihar. This was also the case earlier as well.
While there is a significant increase in the volume of digital transactions, the increase in the number of ATMs could reflect a parallel increasing demand for cash. One of the reasons could be the Direct Transfer benefits that were provided to the marginalized sections of the society during the COVID-19 pandemic. The increase in ATMs of SBI both in Metros as well as Rural centres, substantiates this trend.
While a fall in the number of ATMs during the pandemic could be an effort to cut down the overhead expenses, the increase in the numbers during 2021 points to a return to some sort of normalcy.
