Abstraction in Java focuses on what an object does, not how it does it. It's achieved using the abstract keyword for classes and methods, hiding internal details to reduce complexity and improve security. An abstract class can contain both abstract and non-abstract methods but cannot be instantiated directly, as shown with the `ATM` example.

Developers use abstraction to create a common interface while allowing different implementations. A child class, like `IciciBank`, must override all abstract methods to become concrete and allow object creation. This enforces a contract, making code easier to maintain and enabling loose coupling in larger applications.

This approach is foundational in object-oriented design, mirroring real-world systems like an ATM where users interact with high-level actions. Future Java frameworks and libraries continue to rely on abstraction for extensibility. Understanding these rules is key for building scalable, modular software.