Cash Shortage Hits Bengaluru ATMs: ₹500 Notes Becoming Rare Ahead of Elections

Bengaluru: Citizens in Bengaluru are facing an unusual cash crunch as ATMs across the city report severe shortages. Residents are moving from one ATM to another but are often unable to withdraw sufficient cash. Even ₹500 notes, which form the backbone of daily transactions, have become increasingly difficult to find.

According to The Economic Times, banks in the city are struggling to meet the surge in demand. While cash is still arriving at banks, the sudden spike in withdrawals has left many ATMs understocked, with only limited cash being dispensed.

Rising Cash Withdrawals

Bankers report that cash withdrawals from current and overdraft accounts have increased sharply, especially among businesses in construction, property development, and government civic projects, where salaries and payments are often made in cash. Normally, large withdrawals return to the banking system within a few days, but in recent weeks, the flow back has slowed, creating a temporary imbalance.

Election-Linked Demand?

Experts suggest that the upcoming Bengaluru municipal elections, along with assembly elections in neighboring states like Kerala and Tamil Nadu in the coming months, may be driving higher cash demand. Political parties and prospective candidates may have begun accumulating funds for election-related expenses, contributing to the shortage in the city.

According to M.S. Mahableshwar, former CEO of Karnataka Bank, “A consistent rise in cash withdrawals often acts as an early warning signal. The RBI closely monitors currency availability and has adequate policy measures to address any temporary imbalances.”

Banks Urge Digital Banking

Authorities note that ₹500 notes, essential for everyday transactions, are particularly scarce. Banks are prioritizing ATM cash replenishment, but availability at branches remains limited. Bankers have escalated the issue to senior officials and sought assistance from the Reserve Bank of India (RBI) to ease the situation. Meanwhile, customers are being encouraged to adopt digital banking solutions to reduce dependence on cash and mitigate the current shortage.