For failed ATM transactions Banks will now pay customers ₹100 per day penalty

September 20: In a great relief to the customers, Banks will now have to pay a penalty for all failed digital transaction where the customer is not at fault, according to the new framework laid out by the Reserve Bank of India (RBI). Several times, during payments or fund transfers, the amount is debited from the user but is not credited to the receiver account. Now, as per the latest guidelines, if the money is not credited within the assigned time frame, a penalty of ₹ 100 per day will be paid by the bank.

The RBI has categorised eight different avenues of transaction in which the new guidelines will be applicable, including ATMs, card transactions, immediate payment system, unified payment interface and prepaid cards.

The timeline for auto-reversal has been set at between one day after the transaction to five days. Most financial compensations have been set at ₹100 per day if the reversal does not happen within a specified timeline, the RBI said. Customers who do not get the benefit of redress of the failure as defined in the TAT, can register a complaint to the banking ombudsman.

During an ATM transaction, if the customer’s account is debited but cash has not been dispensed, the bank has five days to credit the amount back. Failing to do so, a penalty of Rs 100 per day will have to be paid by the bank to the account holder. If during an IMPS transaction, the amount is debited from the sender but is not received by the beneficiary, the beneficiary bank has an additional 1 day to auto-reverse the money or else will have to pay a penalty of Rs 100 per day. The same is applicable for Unified Payments Interface (UPI) transfers. Though while paying to a merchant, the transaction confirmation is not received, the bank gets five days to resolve the issue.

The move is expected to benefit users of various payment systems including UPI, e-wallets and others. The Reserve Bank of India has said the newly announced framework will build customer confidence and bring uniformity in the processing failed transactions, where the customer is not at fault.