Even though we now make payments through UPI at everything from tea stalls to large malls, the importance of cash remains undiminished. It often happens that we need a 10 or 20 rupee note for some small task, but the ATM only dispenses crisp 500 rupee notes. To address this problem, the Indian government and the Reserve Bank of India (RBI) are working on a unique technology called Hybrid ATM.

What are these Hybrid ATMs?

Hybrid ATMs are modern machines that not only dispense money but also allow you to exchange larger notes for smaller ones or coins. Simply put, if you have a 500 rupee note and need small change, you can insert it into this machine and receive 10, 20, or 50 rupee notes and coins.

These machines can work in two ways:

• Cash Withdrawal: Withdraw money like a normal ATM.
• Currency Exchange: Exchanging larger notes for smaller notes and coins.

How will the general public benefit?

The problem of change is a long-standing issue in India. Often, shopkeepers refuse to sell goods when they see a 500 rupee note, or customers are forced to buy candy or other small items. Hybrid ATMs will eliminate this problem.

Convenience for small businesses: Street vendors and small shopkeepers no longer have to make the rounds of banks for daily transactions.

Convenience for travelers: These machines will be especially useful in crowded places like bus stands, railway stations, and hospitals, where there is often a dire need for discounts.

No smartphone required: This is a boon for those who don't use smartphones or lack good internet access.

Trial begins in Mumbai

According to reports, a pilot project for this scheme has already been launched in Mumbai. These machines are being tested in select bank branches to assess their technical effectiveness. Following the successful implementation, the government and the RBI are preparing to implement them on a larger scale across the country.

Why is there a need for cash in the midst of Digital India?

A question often arises: when the government is promoting digital payments, why is there so much emphasis on cash again? Experts believe that a large part of India's economy is still tied to the informal sector, where cash is the primary medium of payment. Furthermore, the availability of small notes improves the ease of living in the event of a UPI server failure or internet outage.