Cash Crunch at ATMs as Ramadan Begins in Pakistan: Customers Face Major Disruptions

As the holy month of Ramadan 2025 begins, a significant number of Automated Teller Machines (ATMs) across Pakistan, particularly in Karachi, have run out of cash, leaving thousands of customers frustrated. The surge in demand for cash withdrawals—driven by pre-Ramadan shopping, household expenses, and Zakat-related financial planning—has led to a widespread cash shortage at ATMs, causing inconvenience for the general public.

Why Are ATMs Running Out of Cash?

Several key factors have contributed to the ongoing ATM cash shortage:

1. Increased Demand for Cash:
   As Ramadan marks a time of charity, shopping, and financial preparations, a large number of people rushed to ATMs, leading to a faster-than-usual depletion of available cash.
2. Banking Holiday for Zakat Deduction:
   The State Bank of Pakistan (SBP) has designated Monday, March 4, 2025, as a public holiday for Zakat deduction, meaning that banks will not be conducting routine transactions. This has further delayed cash replenishment at many ATMs.
3. Avoiding Zakat Deductions:
   Many account holders withdraw large sums of money before the first of Ramadan to avoid automatic Zakat deductions, which apply to specific bank balances as per Pakistan’s Islamic banking laws.
4. Limited Banking Services on Weekends:
   With Sunday being a banking holiday, cash deposits to refill ATMs could not be processed efficiently, worsening the cash crunch.

Customers Express Frustration Over ATM Downtime

The sudden depletion of ATMs caused long queues outside available teller machines across major cities, including Karachi, Lahore, and Islamabad. Many customers were forced to visit multiple ATMs in search of cash, causing frustration and inconvenience.

“I went to three different ATMs in Saddar and Clifton but found all of them out of service. The only one I found with cash had a long queue of over 20 people,” shared a local Karachi resident.

Banks, including United Bank Limited (UBL), had already warned customers about limited services due to the Zakat deduction process. A UBL notification stated:

“All digital channels, including UBL Digital App, internet banking, debit and credit cards, and ATM services, will not be available on Sunday, 2nd March 2025, from 12:00 AM to 10:00 AM.”

This disruption left many unable to access their funds at a critical time.

How Many ATMs Are Operational in Pakistan?

According to the State Bank of Pakistan’s (SBP) latest Payment System Review for Q1 FY2025, there are currently 19,170 ATMs installed across the country. Despite this growing banking infrastructure, frequent cash shortages during peak seasons like Eid and Ramadan remain a persistent issue.

What’s Next? Will the Situation Improve?

• Banks are expected to refill ATMs once operations resume after the Zakat deduction holiday.
• Customers are advised to use alternative digital banking solutions, such as mobile banking apps, online fund transfers, and debit card payments where possible.
• The State Bank of Pakistan may issue directives to ensure smooth ATM operations during Ramadan to prevent further disruptions.

Final Thoughts: A Recurring Problem That Needs a Solution

This is not the first time Pakistanis have faced cash shortages at ATMs during Ramadan. Every year, the combination of high withdrawal demand, Zakat deductions, and weekend banking limitations leads to inconvenience for customers. Banks and regulatory authorities must implement better cash management strategies to prevent such issues in the future.

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