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Bank to pay you Rs 100 per day penalty for delay in transaction beyond these limits

Do you know the number of days within which your bank has to reverse debits for failed transactions from your account and the amount of compensation you can get for delay beyond these timelines?

The Reserve Bank of India (RBI) has issued a circular dated September 20, 2019, on the harmonisation of Turn Around Time (TAT) and customer compensation in case of failed transactions. This means that if the bank does not reverse the money debited from your bank account due to a failed transaction within a specified time period, then they would have to pay a penalty to the customer. The penalty has to be paid on a per day basis for delaying the credit of money into the customer's account.

As per rules, your bank has to pay a penalty to you if it delays reversing debits of failed financial transfers from your account. Therefore, knowing the time allowed for reversal beyond which you can get compensation for different types of transactions such as failed cash withdrawals from ATMs, failed e-commerce payments etc is important.

This would be beneficial for customers as whenever a cash withdrawal from an ATM fails, i.e., you try to withdraw money from the ATM but the machine does not disburse the money, you still get a message from your bank that money has been debited from your account. Even in case of payments made on an e-commerce website, it may so happen that money is debited from your account but is not credited to the seller's account. Consequently, you may be left worried about how long it will take to get the money back in your bank account. These RBI guidelines tell you the maximum time a bank can take to credit your money back in your bank account before the penalties kick in.

According to the RBI circular, the penalty will be paid to you if the bank does not reverse the payment within the specified time period and failure of transaction happens due to reasons beyond your control. Examples of such transactions are - failure in communication link, non-availability of cash, time out sessions etc.

Given below is the turn around time set for banks to auto-reverse the payment debited from your account and the penalty that will be paid to you if the bank takes more than the specified time.
Description of incident Timeline of auto-reversal Compensation payable
Customer account debited but cash not dispensed from ATM including micro-ATMs Reversal of failed transaction within a maximum of T+5 days Rs 100 per day for delay beyond T+5 days, to the credit of account holder.
Card account debited but beneficiary card account not credited in case of card to card transfer Transaction to be reversed within T+1 day if credit is not effected to the beneficiary account Rs 100 per day for delay beyond T+1 day
Account debited but confirmation not received at merchant location, i.e., charge-slip not generated Auto-reversal within T+5 days Rs 100 per day of delay beyond T+5 days
Transaction on e-commerce websites where account is debited but confirmation not received at merchant’s system Auto-reversal within T+5 days Rs 100 per day of delay beyond T+5 days
IMPS transaction – account debited but beneficiary account is not credited If unable to credit, auto-reversal in T+1 day Rs 100 per day if delay is beyond the T+1 day
Transfer of funds via UPI payments – Account debited but beneficiary account is not credited If unable to credit to the beneficiary account, auto-reversal by the beneficiary bank by T+1 day Rs 100 per day if delay is beyond T+1 day
Payment made to merchant via UPI – Account debited but transaction confirmation not received at merchant location Auto-reversal within T+5 days Rs 100 per day if delay is beyond T+5 days
Account debited but transaction confirmed not received at merchant location for payments made by Aadhaar Enabled Payment System including Aadhaar Pay Acquirer to initiate “Credit Adjustment ” within T+5 days Rs 100 per day if delay is beyond T+5 days
Account debited but beneficiary account not credited for payments made by Aadhaar Enabled Payment System including Aadhaar Pay Acquirer to initiate “Credit Adjustment ” within T+5 days Rs 100 per day if delay is beyond T+5 days
Delay in crediting beneficiary’s account for payments made via Aadhaar Payment Bridge System (APBS) Beneficiary bank to reverse the transaction within T+1 day Rs 100 per day if delay is beyond T+1 day.
Delay in crediting beneficiary’s account of reversal of amount for payment made via NACH Beneficiary bank to reverse the uncredited transaction within T+1 day Rs 100 per day if the delay is beyond T+1 day
Account debited despite revocation of debit mandate with the bank by the customer for NACH payments Customer’s bank will be responsible for such debits. Resolution to be completed within T+1 day Rs 100 per day if the delay is beyond T+1 day
Payments made via card or mobile wallets where two different banks are involved, then such transactions will be done using UPI, debit/card, IMPS etc. Reversal of money in such cases will be done as mandated by UPI, Card or IMPS as mentioned above. Compensation will be paid accordingly as per the method used to make payment
Payments made via card or mobile wallet but beneficiary account is not credited ; the transaction is done within the same bank or same mobile wallet Reversal to de done in Remitter’s (initiator) account within T+1 day Rs 100 per day if delay is beyond T+1 day
Payment made via card or mobile wallet but transaction confirmation not received at the merchant location for payment done within the same bank or same mobile wallet Reversal to de done in Remitter’s (initiator) account within T+1 day Rs 100 per day if delay is beyond T+1 day
*T refers to the day of the transaction

What if the bank does not pay attention to your complaint
If the bank does not respond to your complaints and does not pay you the penalty amount which you are liable to receive, then you can file a complaint with the bank. If the grievance remains unaddressed then you can escalate the complaint to RBI's banking ombudsman. In case of digital transactions such as failed payments via mobile wallets, you can approach the digital ombudsman of the RBI to resolve the issue.
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