RBI rules mandate banks to pay customers between Rs 100 and Rs 5,000 daily for service delays. Compensation applies to failed digital payments, credit card closures, and property document returns. Anshul Verma said, “The clearest example is the return of property documents,” which banks must complete within 30 days of repayment.
Synopsis
From stuck credit card closure requests to lost property papers, RBI rules require banks to pay you for every day they're late. A customer earlier this year won Rs 3.21 lakh for a delayed credit card closure. Here are 5 situations where the clock ticks in your favour, with compensation ranging from Rs 100 to Rs 5,000 a day.
Listen to this article in summarized format
What happens if you apply for a credit card closure with your bank, and it takes longer than the prescribed time limit? It will be liable to compensate you for each day’s delay. And it’s not just the delay in processing the card closure request; banks are also penalised for delays in credit report correction, failed digital payments, and much more.
Your bank will pay you a late fee ranging from Rs 100 to Rs 5000 per day (and sometimes with interest), if there’s a lack or delay in processing your request within the prescribed timeframe.
RBI's approach to customer compensation is essentially deadline-driven: it fixes a turnaround time for a service, and if the bank overshoots, a per-day amount applies, usually without the customer having to ask, Anshul Verma, Partner, SKV Law Offices, told ET Wealth Online.
“The clearest example is the return of property documents,” he said, adding that banks must hand back the originals, and remove any registered charge, within 30 days of full repayment, failing which they owe the borrower a per day compensation."
Likewise, credit-report correction, failed ATM, UPI, card and other authorised-payment transactions also attract automatic compensation, after the prescribed reversal period, shared Rohit Jain, Managing Partner, Singhania & Co.
Here we take a look at 5 times when banks are mandated to pay fixed daily compensation to the customer.
5 times when your bank has to compensate you
1-Failed Digital Payments
As per the RBI rules, customers are eligible for compensation in case of failed ATM, card, digital transactions etc.
Did a UPI payment or ATM withdrawal fail, but your money still got deducted? If the bank doesn't fix it within the RBI's set timeline (TAT), which is T+1 or T+5 in most cases, it must credit you Rs 100 per day of delay on its own, without you having to ask.
In addition, the RBI issues payments in cases of delays that happened with a number of transactions conducted via ATMs. As for unauthorised transactions that happened electronically, a customer might be absolved or fully responsible depending on some factors. Consequently, the compensation depends on the particular RBI regulation used, shared Mukesh Pandey, Founder & MD, Rupyaapaisa.com.
2-Credit Card Closure
Reserve Bank of India rules mandate that banks/card-issuers must process a credit card closure request within 7 working days. In case of delay, they are liable to pay Rs 500 per calendar day of delay to the cardholder, till the closure of the account.
In an article we did in April 2026, a user won Rs 3.21 lakh compensation from his credit card issuing bank over delay in processing his closure request. Here’s how he won.
3-Loan Property Documents Return
If you took a loan and have now fully repaid or settled the same, your bank or lender has 30 days to return your original property documents.
As per the RBI guidelines dated September 13, 2023, where the delay in returning the papers is attributable to the bank, it is required to compensate the borrower at Rs 5,000 per day for each day of delay, explained N.L. Ganapathi, Partner at AP & Partners.
In case of loss/damage to the papers, the bank will assist you in obtaining duplicate/ certified copies and bear the associated costs, in addition to the Rs 5000/day compensation.
4-Credit Report Inaccuracy/Correction
Any disputes about one’s credit report need to be resolved within a period of 30 days. If the bank fails, the consumer is entitled to compensation of Rs 100 per calendar day of delay if their complaint is not resolved.
5-Bank Locker Loss
Under RBI rules, the bank’s liability in case of locker loss caused by negligence, fire, theft or fraud is capped at 100 times the annual rent, Jain underlined, adding that delayed cheque collection attracts policy-specified interest.
So, if your locker’s annual rent is Rs 3000, the maximum compensation you can get under the RBI framework would be Rs 3 lakh (3000 * 100).
#
When does the bank have to compensate you?
Bank's deadlineCompensation1Account debited, ATM cash not dispensedWithin T+5 daysRs 100 per day beyond T+52Account debited, card-to-card / PoS transaction failedWithin T+5 daysRs 100 per day beyond prescribed TAT3UPI transaction fails but account debitedWithin T+1 day for reversal in applicable casesRs 100 per day beyond the prescribed TAT4IMPS transaction fails but account debitedWithin T+1 dayRs 100 per day beyond T+15NEFT: Beneficiary not credited and money not returnedWithin 2 hours of the relevant settlementPenal interest/compensation as prescribed6Bank doesn't return original property documents after loan repaymentWithin 30 days of repayment/settlementRs 5,000 per day for delay attributable to bank7Bank delays credit-card complaint beyond prescribed periodUp to 30 days, depending on complaintRs 100 per day if complaint not resolved within the prescribed timeline8
Bank fails to rectify incorrect credit information within prescribed time
30 calendar days from receipt of complaintRs 100 per day for delay beyond the prescribed period
(Source: RBI website)
Depending on the circumstances, the customer may also have grounds to seek additional compensation for losses, costs or hardships arising from the bank's failure to meet its obligations, Ganapathi added.
Do banks compensate in case of digital fraud too?
Verma explained that digital fraud is treated as a liability question rather than a daily penalty. Customers bear no liability where the bank is at fault, or where a third-party breach is reported within three working days. A revised framework from January 2027 adds compensation of up to Rs 25,000 for small-value frauds.
Beyond these specific triggers, the RBI Ombudsman can award up to Rs 30 lakh for consequential loss and Rs 3 lakh for harassment.
Are you eligible to seek compensation from your bank?Here’s how to do it
The first thing, according to Pandey, is that the customer must understand whether their problems fall under the RBI regulation offering compensation or the consumer rights regime in general.
Identifying the triggering RBI direction should be followed by calculating the applicable deadline and preserving account statements, transaction IDs, alerts, loan-closure proof, document lists and correspondence, according to Jain. Some compensation, particularly failed-payment compensation, must be credited suo motu.
If you find yourself in such a situation, Raheel Patel, Partner, Gandhi Law Associates, advises that you complain to the bank in writing first and keep the dates, since most compensation runs per day of delay. Each bank's own compensation policy, published on its website, often goes further than the RBI minimum.
The notice should demand the return of the original documents and state clearly that non-return amounts to a serious deficiency in service and professional negligence.
Ganapathi suggested that it should also give the bank a fixed time to comply, such as one week, and say that legal action will follow if it does not. “If the bank still does not act, the borrower can file a complaint with the banking ombudsman or with the consumer commission that has jurisdiction.”
If the bank does not reply within 30 days, or the reply is unsatisfactory, the customer can approach the RBI Ombudsman at cms.rbi.org.in within 90 days. "The service is free, and awards go up to Rs 30 lakh for loss and Rs 3 lakh for harassment," Patel added.