Bank Branches and ATMs in India

The banking infrastructure in India consists of two key components — bank branches and Automated Teller Machines (ATMs). Together, they form the backbone of physical banking services in the country, ensuring financial inclusion, accessibility, and the smooth delivery of financial products across urban and rural regions.

Bank Branches in India

India possesses one of the largest branch networks in the world, with over 1.3 lakh bank branches operating nationwide. Branch expansion has historically been a major strategy for increasing financial inclusion, especially in rural and semi-urban areas.
Distribution and Reach:

• In urban areas, branch density is higher, averaging about 18–19 branches per 100,000 adults.
• In rural and semi-urban areas, the figure is lower, averaging around 7–8 branches per 100,000 adults.
• Public sector banks account for the majority of the branch network, followed by private and cooperative banks.
• In recent years, a growing number of new branches have been established in rural regions to support inclusive banking initiatives.

Trends in Branch Expansion:

• While the number of branches continues to grow, the focus is gradually shifting towards digital and hybrid banking models.
• Banks are transforming traditional branches into service and advisory centres, where more complex financial activities like loans, investments, and wealth management are handled, while routine transactions are being digitised.
• Government initiatives such as financial inclusion drives and the Jan Dhan Yojana have led to increased branch penetration in previously unbanked areas.

Importance of Bank Branches:

• Facilitate access to formal financial services for individuals and businesses.
• Provide human interaction and advisory support, which is essential for trust-building.
• Help in delivering government benefits and subsidies directly to beneficiaries.
• Enable credit delivery to agriculture, small businesses, and priority sectors.

Limitations of Branch Banking:

• High operational and maintenance costs due to staffing and infrastructure requirements.
• Limited reach in remote and hilly regions where establishing branches is not economically viable.
• Declining footfall in urban branches due to the rise of digital banking platforms.

ATMs in India

ATMs form a crucial component of India’s banking outreach, providing 24-hour access to essential banking services such as cash withdrawals, deposits, and balance enquiries. As of early 2025, India has around 2.16 lakh ATMs across the country, comprising both on-site and off-site units.
Distribution and Composition:

• Approximately 1.3 lakh ATMs are located on-site, i.e., within or near bank branches.
• Around 85,000 ATMs are off-site, located in public places such as malls, markets, and transport hubs.
• The average number of ATMs per 100,000 adults is about 21, reflecting moderate penetration relative to population size.

Trends and Developments:

• The total number of ATMs has slightly declined in recent years due to rising digital payments, especially through Unified Payments Interface (UPI) and mobile banking.
• Many banks are rationalising their ATM networks, preferring shared or white-label ATMs to reduce costs.
• Technological upgrades are transforming ATMs into multi-functional kiosks, offering services such as bill payments, fund transfers, and mini statements.
• In semi-urban and rural regions, ATMs continue to play a crucial role as the most accessible form of banking.

Significance of ATMs:

• Provide customers with convenient, self-service access to cash and basic banking operations.
• Reduce congestion in bank branches by handling routine transactions.
• Promote cash availability in remote locations, supporting daily financial needs.
• Serve as a bridge between digital and traditional banking, complementing online systems.

Challenges and Limitations:

• Operational costs related to maintenance, security, and cash replenishment are high.
• Low transaction volumes in rural areas make ATM operation less profitable.
• Infrastructure issues such as poor internet connectivity and power shortages affect reliability.
• Increasing adoption of cashless payment systems is gradually reducing ATM usage.

Combined Perspective

Bank branches and ATMs together constitute the physical foundation of India’s banking system. While branches provide comprehensive financial services and human interaction, ATMs offer convenience and accessibility for routine cash-based transactions.
Key Insights:

• The banking system is undergoing a transformation toward “phygital banking” — a blend of physical presence and digital accessibility.
• Urban areas enjoy high banking density, whereas rural regions continue to need policy-driven branch and ATM expansion.
• Both channels remain critical for ensuring financial inclusion, particularly for citizens with limited access to smartphones or digital literacy.
• The Reserve Bank of India monitors the growth and distribution of branches and ATMs as a key measure of financial outreach and stability.

Future Outlook:

• The number of physical branches may stabilise as digital channels take precedence, but branches will remain vital for advisory and credit functions.
• ATMs are expected to evolve into smart banking terminals, offering multi-purpose services beyond cash dispensing.
• The focus of banking infrastructure will likely shift towards optimised physical networks, supported by robust digital ecosystems, ensuring access, convenience, and cost efficiency.