Half of new bank branches in FY25 opened in tier-1 centres; ATMs dip: RBI

RBI's Trend and Progress report said scheduled commercial banks expanded branches mainly in tier-1 centres in FY25, while ATM numbers declined modestly due to fewer off-site machines

Commercial banks’ branch expansion was mostly concentrated in tier-I centres, which accounted for around half of the new branches opened in financial year 2025 (FY25), according to the Reserve Bank of India’s Trend and Progress report.

 

As of end-March 2025, scheduled commercial banks (SCBs) operated 1.64 lakh domestic branches, marking a 2.8 per cent increase over the previous year, the report said.

 

Branch expansion slowed across tier-II to tier-VI regions, except for tier-IV locations.

 

Total number of ATMs reported a modest decline in FY25, driven by a reduction in off-site ATMs, even as on-site installations increased. Public sector banks continued to hold the largest share of ATMs, followed by private sector banks and white-label ATM operators.

 

 

Private lenders constituted 52 per cent of total new branches opened during the year, lower than 65.5 per cent in FY24. Further, 67.3 per cent of the new branches of public sector banks were opened in rural and semi-urban centres, while the proportion for private sector banks was 37.5 per cent.

 

The southern region accounted for the largest number of bank branches, while banking penetration was highest for the northern region at end-March 2025.

 

Increase in digitalisation of payments reduced the customers’ requirement of transacting with ATMs, the report said. Public sector banks accounted for the highest share in the total number of ATMs, followed by private sector banks, and white label ATMs – those owned and operated by non-bank entities, at end-March 2025.

 

“Public sector banks had a more even distribution of ATMs across population groups, while the presence of ATMs of other bank groups was towards metropolitan, urban, and semi-urban centres,” the report said. In contrast, 79.4 per cent of the total white label ATMs were in rural and semi-urban centres at end-March 2025.