Since credit card transactions like cash advance can be performed at most ATMs, are banks required to be PCI DSS compliant?
The Payment Card Industry DSS rules also apply to banks. I was at a large UK bank that had to change it's customer database to make the card information more secure from staff as part of a PCIDSS initiative. This included obscuring part of the PAN (the long number) from operators in the call centres etc.
It should be noted however, that in certain jurisdictions (i.e. the UK) there are a lot of other regulators that have much more effective security controls that are placed on banks and so whilst PCI DSS is applied to the cardholder data usage, it is not the be all and end all.