₹500 Notes Will Continue in ATMs: Government Clears the Air on Viral Rumors

In response to swirling rumors and social media claims, the government has officially clarified that ₹500 currency notes are neither being withdrawn nor removed from ATMs. Recent online posts and some media reports had claimed that by the end of 2025, ₹500 notes would no longer be available in ATMs. However, the Finance Ministry has now put those speculations to rest with a clear statement in Parliament.

According to the ministry, the Reserve Bank of India (RBI) has no plans to stop the circulation of ₹500 notes. The only ongoing initiative is to increase the availability of smaller denomination notes — ₹100 and ₹200 — in ATMs across the country. The move is intended to make daily transactions easier for the public and to reduce the problem of not having change for smaller purchases.

RBI’s New ATM Guidelines

The RBI issued a circular on April 28, 2025, directing banks and white-label ATM operators to adjust their cash distribution strategy. The guidelines are as follows:

• By September 30, 2025: At least 75% of ATMs across India must have one cassette dedicated to dispensing ₹100 or ₹200 notes.

• By March 31, 2026: The requirement will increase to 90% of ATMs.

This policy ensures that smaller notes become more accessible, particularly for day-to-day spending needs. Importantly, the RBI confirmed that ₹500 notes will continue to be available alongside the smaller denominations.

Why This Change is Necessary

Small denomination currency plays a crucial role in everyday transactions such as grocery shopping, paying taxi fares, and purchasing fruits and vegetables. Often, when ATMs dispense only ₹500 notes, customers and shopkeepers struggle with a shortage of change. By increasing the supply of ₹100 and ₹200 notes directly from ATMs, the RBI aims to reduce these daily inconveniences.

The RBI’s move also aligns with its broader strategy to improve cash circulation efficiency and reduce reliance on larger denominations for routine payments.

Parliamentary Discussion on the Issue

During a Rajya Sabha session, MPs Yerram Venkata Subba Reddy and Milind Deora sought clarification from the government on whether there were plans to phase out ₹500 notes or stop their distribution from ATMs.

Responding to the query, the Finance Ministry categorically stated that there is no proposal to halt the supply of ₹500 notes. The ministry reaffirmed that ATMs will continue dispensing ₹500 notes along with ₹100 and ₹200 denominations, ensuring that all types of currency remain in circulation.

Public Reassurance

This clarification has been welcomed by the public, particularly traders, small business owners, and daily wage workers who rely heavily on cash transactions. The reassurance that ₹500 notes will remain in use helps maintain stability and confidence in the currency system.

Financial experts also note that while the increased focus on smaller denominations will benefit everyday consumers, retaining ₹500 notes in circulation is equally important for higher-value cash transactions and efficiency in cash management.

The Bottom Line

The government’s message is clear: ₹500 notes are here to stay, both in circulation and in ATMs. The new ATM guidelines are aimed purely at making smaller notes more accessible — not at replacing or discontinuing the ₹500 denomination.

As the September 2025 and March 2026 deadlines approach, ATM operators across the country will adjust their machines to meet the RBI’s requirements, ensuring that citizens can withdraw both small and large denomination notes with ease.