The Reserve Bank of India has issued new rules to protect consumer’s interest in case of failed transactions. These guidelines that will come into effect from October 15 will cover all the participants in the authorized payment systems and the RBI will strictly enforce timely resolution and payment of compensation to consumers in case of delays. The new circular puts the onus on the banks and other participants to resolve the customer’s grievance in a timely manner without him lodging a formal complaint about this purpose. After consultation with stakeholders, the framework for turn-around time for failed transactions and payment of compensation has been finalized which will boost customer’s confidence and bring uniformity in the system, RBI said in a statement issued a few days back.
According to the RBI circular, a failed transaction is the transaction that has not been completed due to any reason not attributed to the customer such as failure of communication links, non-availability of cash in an ATM and time-out among others. It will also cover those transactions that could not be completed due to a lack of proper or complete information and delay in initiating a reversal.
RBI has directed the payment system participants to compensate the intended beneficiary if money has been deducted from the sender’s account but not credited to the beneficiary. Similarly, if there is a delay in processing a transaction at the sender’s bank beyond the turn-around time, then the compensation will be paid to the sender. Though the circular covers both banks and non-bank participants it will only cover domestic transactions where both the parties, sender, and receiver, are within the country.
In case of a failed ATM transaction, banks will have a maximum of five days’ (transaction date plus five days) time to reverse the transaction, otherwise, they will have to pay Rs 100 per day to the customer. Turn-around time to complete a transaction for card-to-card transfer has been set one day (T+1), for point of sale (PoS) and card-not-present transactions, it is T+5 days, for IMPS (T+1 day), for UPI transactions to beneficiary account (T+1 day), for UPI payments to merchants (T+5 days), for Aadhaar enabled payment systems (including Aadhaar Pay) (T+5 days), for Aadhaar Payment Bridge System (ABPS) T+1 day, for NACH transfers it is T+1 day, and also for the prepaid payment instruments (PPIs) it is kept T+1 day. However, the compensation to the aggrieved customer has been maintained at a uniform rate of Rs 100 per day for delays beyond the turn-around time (TAT).
