Indo-Pakistan tensions: Banks saw demand for cash surge near borders

As branches shut in the wake of shelling and security concerns post Operation Sindoor, banks are focusing on refilling ATMs to meet the surging demand for cash

Banks are seeing a surge in demand for cash in north India, particularly in border areas, since the launch of Operation Sindoor.

 

With most of the bank branches in the border areas shut over safety concerns due to shelling by Pakistan, particularly in Punjab and the Union Territory Jammu & Kashmir, banks are working overtime to keep cash in the automated teller machines (ATMs).

 

The demand for cash has gone up as there is apprehension that internet/mobile banking services may be interrupted due the tension between the two countries.

 

Some of the banks are facing cash demand of around ₹100 crore to ₹110 crore every day from the border areas, said a senior bank official in the northern region.

 

“Movement of cash in the border area is challenging because of heavy shelling,” the official said.

 

“The first aim is to replenish the ATMs with cash since most branches in border areas have to be closed due to safety. Once or twice a day we are trying to fill up the ATMs so the customers are not inconvenienced,” the official added.

 

On Friday, Finance Minister Nirmala Sitharaman asked banks to remain vigilant and take all steps to ensure uninterrupted services to customers in view of heightened military conflict between India and Pakistan. She advised banks to ensure the safety of bank employees and their families working at branches along the border areas.

 

While cash in currency chests belongs to the Reserve Bank of India (RBI), they are managed by individual banks. Movement of cash is also a responsibility of banks. 

 

There are 2,794 currency chests in India, out of which 1,467 are managed by the State Bank of India.

 

According to bankers, from April till the middle of May, demand for cash is generally high due to the post-harvest season. This time, demand has accentuated due to the conflict.

 

According to latest RBI data, currency in circulation (CIC) as of May 2, 2025 was ₹38.10 trillion, up 0.4 per cent in the previous week and 2.4 per cent over March end. On a year-on-year basis, CIC growth was 6.7 per cent.

 

With the announcement of a ceasefire understanding between India and Pakistan on Saturday evening, bankers expect normalcy to return so far demand for cash is concerned. 

  Aggregate Monthly Deposit and Withdrawal of Notes for March 2025 (Rs crore) 

	DEPOSIT	WITHDRAWAL
Jammu and Kashmir	2,634	3,877
Punjab	750	1,009
Rajasthan	10,886	10,699

  Source: RBI