The Reserve Bank of India on Friday the 20th September prescribed a turnaround time (TAT) for banks to settle failed transactions for customers and also notified compensations payable for various types of customer complaints. A large number of customer complaints emanate on account of unsuccessful or ‘failed’ transactions. Failure could be on account of various factors not directly attributable to the customer such as disruption of communication links, non-availability of cash in ATMs, time-out of sessions, non-credit to beneficiary’s account due to various causes, etc. Rectification / Compensation paid to the customer for these ‘failed’ transactions is not uniform.
"To have prompt and efficient customer service in all electronic payment systems, it is necessary to harmonise the TAT of resolution of customer complaints and charge-backs, and to have a compensation framework in place for the benefit of customers," the RBI had said.
RBI has notified that:
- The prescribed TAT is the outer limit for resolution of failed transactions; and
- The banks and other operators / system participants shall endeavour towards quicker resolution of such failed transactions.
- Wherever financial compensation is involved, the same shall be effected to the customer’s account suo moto, without waiting for a complaint or claim from the customer.
- 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 of Reserve Bank of India.
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 Rs 100 per day if the reversal does not happen within a specified timeline, the RBI said.
General Instructions covering the TAT :
1. The principle behind the TAT is based on the following :
- If the transaction is a ‘credit-push’ funds transfer and the beneficiary account is not credited while the debit to originator has been effected, then credit is to be effected within the prescribed time period failing which the penalty has to be paid to the beneficiary;
- If there is delay in initiation of a transaction at the originator bank’s end beyond the TAT, then penalty has to be paid to the originator.
2. A ‘failed transaction’ is a transaction which has not been fully completed due to any reason not attributable to the customer such as failure in communication links, non-availability of cash in an ATM, time-out of sessions, etc. Failed transactions shall also include the credits which could not be effected to the beneficiary account on account of lack of full information or lack of proper information and delay in initiating a reversal transaction.
3. Terms like, Acquirer, Beneficiary, Issuer, Remitter, etc., have meanings as per common banking parlance.
4. T is the day of transaction and refers to the calendar date.
5. R is the day on which the reversal is concluded and the funds are received by the issuer / originator. Reversal should be effected at the issuer / originator end on the same day when the funds are received from the beneficiary end.
6. The term bank includes non-banks also and applies to them wherever they are authorised to operate.
7. Domestic transactions i.e., those where both the originator and beneficiary are within India are covered under this framework.
Harmonisation of Turn Around Time (TAT) and customer compensation for
failed transactions using authorised Payment Systems
|Sl. no.||Description of the incident||Framework for auto-reversal and compensation|
|Timeline for auto-reversal||Compensation payable|
|1||Automated Teller Machines (ATMs) including Micro-ATMs|
|a||Customer’s account debited but cash not dispensed.||Pro-active reversal (R) of failed transaction within a maximum of T + 5 days.||₹ 100/- per day of delay beyond T + 5 days, to the credit of the account holder.|
|a||Card to card transfer
Card account debited but the beneficiary card account not credited.
|Transaction to be reversed (R) latest within T + 1 day, if credit is not effected to the beneficiary account.||₹ 100/- per day of delay beyond T + 1 day.|
|b||Point of Sale (PoS) (Card Present) including Cash at PoS
Account debited but confirmation not received at merchant location i.e., charge-slip not generated.
|Auto-reversal within T + 5 days.||₹ 100/- per day of delay beyond T + 5 days.|
|c||Card Not Present (CNP) (e-commerce)
Account debited but confirmation not received at merchant’s system.
|3||Immediate Payment System (IMPS)|
|a||Account debited but the beneficiary account is not credited.||If unable to credit to beneficiary account, auto reversal (R) by the Beneficiary bank latest on T + 1 day.||₹100/- per day if delay is beyond T + 1 day.|
|4||Unified Payments Interface (UPI)|
|a||Account debited but the beneficiary account is not credited (transfer of funds).||If unable to credit the beneficiary account, auto reversal (R) by the Beneficiary bank latest on T + 1 day.||₹100/- per day if delay is beyond T + 1 day.|
|b||Account debited but transaction confirmation not received at merchant location (payment to merchant).||Auto-reversal within T + 5 days.||₹100/- per day if delay is beyond T + 5 days.|
|5||Aadhaar Enabled Payment System (including Aadhaar Pay)|
|a||Account debited but transaction confirmation not received at merchant location.||Acquirer to initiate “Credit Adjustment” within T + 5 days.||₹100/- per day if delay is beyond T + 5 days.|
|b||Account debited but beneficiary account not credited.|
|6||Aadhaar Payment Bridge System (APBS)|
|a||Delay in crediting beneficiary’s account.||Beneficiary bank to reverse the transaction within T + 1 day.||₹100/- per day if delay is beyond T + 1 day.|
|7||National Automated Clearing House (NACH)|
|a||Delay in crediting beneficiary’s account or reversal of amount.||Beneficiary bank to reverse the uncredited transaction within T + 1 day.||₹100/- per day if delay is beyond T + 1 day.|
|b||Account debited despite revocation of debit mandate with the bank by the customer.||Customer’s bank will be responsible for such debit. Resolution to be completed within T + 1 day.|
|8||Prepaid Payment Instruments (PPIs) – Cards / Wallets|
The transaction will ride on UPI, card network, IMPS, etc., as the case may be. The TAT and compensation rule of respective system shall apply.
Beneficiary’s PPI not credited.
PPI debited but transaction confirmation not received at merchant location.
|Reversal effected in Remitter’s account within T + 1 day.||₹100/- per day if delay is beyond T + 1 day.|