Despite UPI Boom, These 5 Indian States Still Rely Heavily on Cash Withdrawals

India's digital payments ecosystem has witnessed tremendous growth over the past few years, with UPI transactions reaching record levels and online payments becoming a part of everyday life. However, the rise of digital transactions has not eliminated the demand for cash. A recent report highlights that several states continue to rely heavily on physical currency, with ATMs dispensing massive amounts of cash every month.

The findings reveal that while consumers are increasingly adopting digital payment methods, cash remains an important mode of transaction for household expenses, local markets, small businesses, and rural economies. According to the report, five states stand out for recording the highest average ATM cash withdrawals, indicating that demand for currency remains strong despite rapid digitalization.

Karnataka Leads the Nation in ATM Cash Withdrawals

Karnataka has emerged as the state with the highest average cash withdrawal per ATM in the country.

Data shows that each ATM in the state dispenses an average of approximately ₹1.73 crore every month. The state's strong economic activity, large urban population, and thriving commercial centers contribute significantly to this figure.

Cities such as Bengaluru, which serve as major technology and business hubs, generate substantial cash demand despite widespread use of digital payment platforms. Consumers continue to rely on cash for various day-to-day expenses, local transactions, and business activities.

The figures suggest that even in one of India's most digitally connected states, cash continues to play a vital role in the economy.

West Bengal Secures Second Position

West Bengal ranks second among states with the highest ATM cash withdrawals.

On average, each ATM in the state records withdrawals of around ₹1.65 crore every month. Cash usage remains deeply embedded in the state's retail and local business ecosystem.

Traditional markets, neighborhood shops, and small-scale enterprises continue to depend heavily on cash transactions. While digital payment options have become increasingly popular, a significant portion of daily commerce still takes place using physical currency.

The high withdrawal figures indicate that cash remains an essential payment medium for many households and businesses across the state.

Tamil Nadu Continues to Show Strong Cash Demand

Tamil Nadu occupies the third spot on the list, with average monthly ATM withdrawals of approximately ₹1.62 crore per machine.

The state's diverse economy, which includes manufacturing, services, trade, and small businesses, contributes to sustained demand for cash. Although digital payment acceptance has grown considerably, many consumers continue to use cash for routine purchases and local transactions.

Small retailers, street vendors, and regional marketplaces often witness a combination of digital and cash payments, helping maintain strong ATM usage throughout the state.

The data highlights that digital adoption and cash usage can coexist, rather than one completely replacing the other.

Chhattisgarh Records Significant ATM Activity

Chhattisgarh also features among the top cash-dependent states.

The average monthly withdrawal per ATM in the state stands at approximately ₹1.52 crore. A large portion of the state's population lives in rural and semi-urban areas where cash transactions continue to dominate many economic activities.

Local businesses, agricultural transactions, and everyday purchases frequently involve physical currency, contributing to consistent demand for cash across the region.

Despite improvements in digital banking infrastructure, cash remains a preferred payment method for many residents.

Odisha Completes the Top Five

Odisha ranks fifth on the list, with average monthly ATM withdrawals reaching approximately ₹1.51 crore per machine.

The state continues to witness strong cash usage, particularly in smaller towns and rural areas. Local trade, community markets, and day-to-day consumer spending often rely on currency transactions.

While digital payments are steadily gaining ground, cash remains a crucial component of financial activity for a large segment of the population.

The figures demonstrate that the transition toward a fully digital economy is still evolving in many parts of the country.

Why Cash Remains Relevant in the Digital Age

Several factors explain why cash continues to maintain its importance despite the rapid growth of online payment systems:

• Widespread use in rural and semi-urban regions

• Preference for cash in local markets

• Ease of small-value transactions

• Limited digital infrastructure in certain areas

• Consumer habits and trust in physical currency

• Business requirements for cash handling

For many individuals and small enterprises, cash remains a convenient and dependable payment option.

The Bottom Line

India's digital payment revolution has transformed the way people transact, but it has not eliminated the role of cash. Karnataka, West Bengal, Tamil Nadu, Chhattisgarh, and Odisha continue to record some of the highest ATM withdrawal volumes in the country, highlighting the enduring importance of currency in everyday economic activity.

The latest data suggests that while digital payments are expanding rapidly, cash and digital transactions are likely to coexist for the foreseeable future, serving different needs across India's diverse economic landscape.