New ATMs for ₹10 & ₹20 Notes: Govt Tests Hybrid Models

Small Cash Struggle: Government Tests New ATMs for ₹10 and ₹20 Notes

Even as UPI payments dominate the Indian economy in 2026, finding physical “chutta” (change) remains a daily headache. Most ATMs in the country currently dispense only ₹500 notes, leaving street vendors and commuters in a tough spot. To fix this, the government is exploring a nationwide rollout of special ATMs that dispense only small-denomination notes like ₹10, ₹20, and ₹50.

The Mumbai Pilot: A Solution for Crowded Markets

According to recent reports from late January 2026, the Reserve Bank of India (RBI) is already testing these machines in Mumbai. You can find these prototypes at high-traffic spots like Dadar market, local railway stations, and public hospitals.

Specifically, the government is testing two different types of machines:

1. Low-Denomination ATMs: These machines function like regular ATMs but hold cassettes filled exclusively with small notes.

2. Hybrid ATMs: These “exchange machines” allow you to insert a crisp ₹500 note and receive a mix of small notes and coins in return.

Why Small Notes Still Matter in 2026

While digital payments have reached even the smallest villages, cash still plays a vital role in the informal economy. Daily wage workers and small shopkeepers often lose customers because they cannot provide change for high-value notes. Furthermore, patchy internet connections and a lack of smartphones in semi-urban areas make cash a reliable safety net.

Actually, the shortage of small cash has become so acute that the RBI is now considering a massive printing boost for ₹20 and ₹50 notes to keep these new machines stocked.

The Challenges Ahead

Despite the excitement, banks are worried about the “logistics of small cash.”

• High Maintenance: Small notes get soiled and torn much faster than ₹500 notes, which means banks must replace them more often.

• Refilling Costs: Sending a security van to refill an ATM with ₹10 notes costs the same as refilling it with ₹500 notes, but the total value is much lower, making it less profitable for banks.

• Space Constraints: Most traditional ATMs only have four “cassettes” for cash. Adding small notes means banks might have to stop dispensing ₹200 or ₹100 notes in those machines.

Also Read | PNB Alert: Why Sovereign Gold Bond Holders Must Visit Their Branch Now

The post New ATMs for ₹10 & ₹20 Notes: Govt Tests Hybrid Models first appeared on Business League.