The ATMs of several public sector banks including big names like State Bank of India and its associate banks, Andhra Bank have been reportedly running short of currency notes in denomination of 100.

Display boards signing 'No Rs 100 notes' are being increasingly seen, causing inconvenience to customers who wish to draw amounts in lower denominations.

It is reasoned that the gap in supply is due to increased traffic of non-customers, after the central bank announced free inter-bank ATM use with effect from April 1, 2009.

Banks have been stocking more currency in denominations of Rs. 500 and Rs. 1000 in response to the increased traffic.

Explaining the increased cash outages, a senior Andhra Bank official, said, “There is a perceptible increase in ATM withdrawals in the last two months. This might result in shortage of Rs. 100 notes in a machine."

The problem is further augmented by the regulator’s policy spelling to dispense only fresh notes.

The private peers have however taken steps to meet the increased demand. An official of ICICI Bank indicated that the bank has taken appropriate steps to ensure availability of cash in all denominations in over 4,500 ATMs - "We keep track of average transactions in every ATM and load one-and-half times more cash," he said.

Private player, Yes Bank plans to set up 3000 ATMs in alliance with First Data Corporation by 2015.

Banks have been scaling up their ATM network to reach more customers and earn revenue in form of transaction-based fees. The Reserve Bank of India has also authorised scheduled commercial banks to install offsite ATM machines at their without seeking its formal permissions.

Recently, SBI set up its first off-site e-centre-cum-bank of ATM in West Bengal.