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Reserve Bank comes out with a new order regarding ‘failed’ transactions

The country’s central bank, the Reserve Bank of India (RBI) has come out with a new order for banks and payment system operators regarding the failed transaction of customers. Under this, the time period has been fixed for the disposal of grievances and auto reversal of the amount on the failed transaction for the banks, which has been termed as Turn Around Time (TAT).RBI

Key points:
i. Banks will have to pay compensation to the customers if there is no settlement or reversal of the transaction within this time period. This compensation will be as per Rs 100 per day after completion of the time period. This RBI order will come into effect on October 15, 2019.
ii. Under this decree, all Authorized Payment Systems like ATM (Automated Teller Machines)Transaction, Card to Card Fund Transfer, PoS (Point of Sale) Transactions, Cardless e-Commerce, IMPS (Immediate Payment System) Transaction, UPI (Unified Payments Interface)Transactions, Aadhaar Enabled Transaction, National Automated Clearing House (NACH) and Mobile app transaction will be covered.

Transaction and compensation details

Description of the incident Matter Timeline of auto reversal of transaction Compensation from bank on delay
ATM Transaction Money was deducted from customer’s bank account but cash was not withdrawn Transaction Day + 5 Days Maximum (T + 5) Rs 100 / day after completion of T + 5 period
Card to card transfer The amount debited from one card but did not reach another card Maximum 1 day after transaction (T + 1) Rs 100 / day after completion of T + 1 period
Transactions from PoS machine, including cash Money was deducted from the account but the merchant did not get confirmation or charge slip was generated. Transaction Day + 5 Days Maximum (T + 5) Rs 100 / day after completion of T + 5 period
E-commerce where card is not present Money deducted from account but merchant did not get confirmation Transaction Day + 5 Days Maximum (T + 5) Rs 100 / day after completion of T + 5 period
Transactions from IMPS The amount was deducted from the account but did not reach the recipient’s account Transaction Day + 1 Day Maximum (T + 1) for Beneficiary Bank Rs 100 / day after completion of T + 1 period
Fund transfer from UPI Amount deducted from account but did not reach beneficiary account Transaction Day + 1 Day Maximum (T + 1) for Beneficiary Bank Rs 100 / day after completion of T + 1 period
Payment to merchant from UPI Money was deducted from account but merchant did not get confirmation Transaction Day + 5 Days Maximum (T + 5) Rs 100 / day after completion of T + 5 period
Aadhaar enabled payment system (AePS), including Aadhaar Money deducted from account but merchant did not get confirmation / did not reach beneficiary account in fund transfer Transaction day + 5 days maximum (T + 5) for credit adjustment Rs 100 / day after completion of T + 5 period
Aadhaar Payment Bridge System (APBS) Delay in credit of money in beneficiary account Transaction Day + 1 Day Maximum (T + 1) for Beneficiary Bank Rs 100 / day after completion of T + 1 period
National Automated Clearing House (NACH) Delay in credit or reversal of money in beneficiary account Transaction Day + 1 Day Maximum (T + 1) for Beneficiary Bank Rs 100 / day after completion of T + 1 period
Prepaid Payment Instruments (PPIs) – Card / Wallet Money in PPI of Beneficiary not credited / Money deducted from PPI but merchant did not get confirmation Transaction Day + 1 Day Maximum (T + 1) Rs 100 / day after completion of T + 1 period


Note: T means day of transaction.