Tinsukia Police said officials with the State Bank of India branch contacted investigators this month to report 12,38,000 rupees - almost $20,000 - had been found shredded inside an ATM on the outskirts of the town.
According to SBI, a total of Rs. 29.48 lakh was fed to the machine on 19th May and due to some technical reason the machine mal-functioned from 20th May (next day) onwards.
When they opened it up, they found the dead rat and notes worth nearly 1.3 million rupees (£14,000) chewed to shreds inside.
Police say at least one rat slipped through a hole in the back of an ATM in northeastern India and started eating.
"We've checked and there is no other criminal or conspiracy angle to the incident".
A rat took up residence in a State Bank of India ATM in the town of Tinsukia, India.
Police on Thursday said rats nibbled through more than Rs 12 lakh worth of banknotes after busting into a cash machine in Assam's Tinsukia district. Most ATMs in India have a closed-circuit camera installed for enhanced security. The notes were in 500-rupee and 2,000-rupee denominations.