CashShortage – Bengaluru ATMs Run Dry Amid Withdrawal Surge
CashShortage – Residents across several neighbourhoods in Bengaluru are struggling to access cash as automated teller machines remain either empty or stocked with limited currency. Over the past week, people have been visiting multiple ATMs in search of withdrawals, only to encounter machines displaying insufficient funds. In particular, ₹500 notes have become increasingly difficult to obtain, raising concerns among daily wage earners and small business operators who rely heavily on cash transactions.
Withdrawal Spike Strains Banking System
Both public sector and private banks operating in Bengaluru are currently grappling with an unusual surge in cash withdrawals. Banking officials clarify that currency supply from central sources has not completely stopped. However, the pace at which customers are withdrawing funds has exceeded the rate at which banks can replenish ATMs.
According to industry sources, machines are being refilled, but the volumes are not sufficient to meet the sudden spike in demand. As a result, several ATMs across residential and commercial areas are running out of cash within hours of being replenished.
Large Cash Outflows From Business Accounts
Senior bank representatives point to substantial withdrawals from current and overdraft accounts as a major reason behind the shortage. Contractors involved in construction projects, real estate developments and civil works are reportedly drawing significant sums to distribute wages in cash.
Under normal circumstances, such withdrawn cash gradually flows back into the banking system within a few days through deposits. This cycle ensures liquidity remains balanced. However, in recent weeks, that return flow has slowed noticeably. With more money leaving banks than coming back in, the strain on ATM networks has intensified.
Election Season Adds to Pressure
Financial observers suggest that the upcoming election calendar may also be influencing cash movement patterns. Elections for the Bruhat Bengaluru Mahanagara Palike are expected before the end of June following directives from the Supreme Court. At the same time, Assembly elections are scheduled in states including Kerala, Tamil Nadu, West Bengal, Assam and Puducherry.
Once the election schedule is formally announced, regulations governing cash transportation and monitoring become stricter. This often prompts individuals and organisations to withdraw funds in advance. While there is no official confirmation linking election activity directly to the current shortage, experts believe the broader political environment may be contributing to heightened demand.
Shortage of ₹500 Notes Causes Concern
Among all denominations, ₹500 notes are reported to be in particularly short supply. These notes are widely used for routine payments, wholesale purchases and wage distribution. Their limited availability has added to public inconvenience.
Banks are prioritising ATM replenishment over large counter withdrawals in branches to ensure wider access for customers. Despite these efforts, availability remains inconsistent across the city. Banking authorities have approached the Reserve Bank of India to address the imbalance and improve the flow of currency where required.
Push for Digital Transactions
In response to the ongoing situation, banking officials are encouraging residents and businesses to make greater use of digital payment options. Platforms such as UPI, net banking and card-based payments are being promoted as practical alternatives to cash withdrawals.
Digital transactions have grown steadily in Bengaluru over the years, particularly in retail and service sectors. However, certain segments, including daily wage payments and small-scale construction activities, continue to rely significantly on physical currency.
Officials maintain that the current shortage is temporary and linked primarily to a mismatch between withdrawal demand and redeposit rates. Efforts are underway to stabilise the situation by improving cash logistics and coordinating closely with regulatory authorities.
For now, customers are advised to plan withdrawals carefully and consider digital methods wherever possible, as banks work to restore normal cash availability across Bengaluru’s ATM network.