The number of automated teller machines (ATMs) declined moderately in FY25 amid the growing shift towards digital payments, while bank branches continued to expand, driven largely by public sector banks (PSBs), according to an RBI report released on Monday.

The Trend and Progress of Banking in India report for FY25 said the total number of ATMs fell to 2,51,057 as of March 31, 2025, from 2,53,417 a year earlier. The decline was led by private sector banks, alongside a reduction by PSBs, mainly due to the closure of offsite ATMs.

Private sector banks’ ATM network shrank to 77,117 from 79,884 in the previous year, while PSBs reduced their ATMs to 1,33,544 from 1,34,694.

“Increase in digitalisation of payments has reduced the customers’ requirement of transacting with ATMs,” the report said.

In contrast, independently operated white-label ATMs increased to 36,216 from 34,602 over the same period.

The report noted that PSBs had a more even distribution of ATMs across rural, semi-urban, urban and metropolitan areas, whereas private and foreign banks remained concentrated in urban and metropolitan centres.

Despite the rise of digital channels, banks continued to expand their physical presence. As of March 31, 2025, the total number of bank branches stood at 1.64 lakh, up 2.8 per cent year on year.

PSBs were more aggressive in opening new branches during FY25. The share of private banks in new branch additions fell to 51.8 per cent from 67.3 per cent a year earlier. More than two-thirds of the new branches opened by PSBs were in rural and semi-urban areas, compared with just 37.5 per cent for private banks.

On financial inclusion, the number of basic savings bank deposit accounts (BSBDAs) rose 2.6 per cent to 72.4 crore, while aggregate balances increased 9.5 per cent to Rs 3.3 lakh crore. The RBI said most of these accounts continued to be serviced through the business correspondent model, underlining its effectiveness at the grassroots level.

From a deposit insurance standpoint, the report noted that 97.6 per cent of accounts were covered as of end-FY25, amid discussions on raising the insurance cap beyond Rs 5 lakh per account. However, the share of insured deposits declined to 41.5 per cent at end-March 2025 from 43.1 per cent a year earlier.