Failed UPI payments and ATM withdrawals can get you ₹100 per day in compensation if refunds exceed RBI deadlines. The rules, effective October 15, 2019, cover domestic transactions. Banks must credit this amount automatically if they miss the T+1 or T+5 turnaround time, without needing any claim from customers.
Failed UPI payments, unsuccessful ATM withdrawals and other payment errors can qualify for ₹100 per day in compensation if refunds exceed RBI's prescribed deadlines. Know the T+1 and T+5 rules, how turnaround time is calculated and what to do if your refund is delayed.
Suppose you make a UPI payment to a friend or merchant, or withdraw cash from an ATM, but the transaction fails even though your bank account is debited. If the money is not returned within the prescribed time, you may be entitled to compensation of ₹100 per day for the delay under Reserve Bank of India (RBI) rules.
The compensation depends on the type of transaction and the deadline prescribed for reversing the amount. Here is what customers need to know.
What is considered a failed transaction?
According to RBI's circular, Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems, dated September 20, 2019, a failed transaction is one that is not completed for reasons not attributable to the customer.
These may include communication failures, an ATM running out of cash, a session timing out, or money not reaching the beneficiary's account despite the sender's account being debited. The framework also covers certain delays in crediting money or initiating a reversal.
The rules came into effect on October 15, 2019, and cover domestic transactions where both the sender and the beneficiary are in India. The term bank also includes authorised non-bank payment service providers, wherever applicable.
RBI states that the prescribed turnaround time is the outer limit for resolving a failed transaction. If compensation is payable, it must be credited automatically, without waiting for the customer to file a claim.
Source: RBI's circular, "Harmonisation of Turn Around Time (TAT) and Customer Compensation for Failed Transactions Using Authorised Payment Systems". Wordings simplified for clarity and examples are added. T refers to the calendar date of the transaction.
What do T, T+1, and T+5 mean?
Under the RBI framework, T refers to the calendar date on which the transaction takes place. T+1 means the following day, while T+5 means five days after the transaction date.
For example, suppose a UPI transfer fails on October 18, and the sender's account is debited, but the beneficiary's account is not credited. The applicable deadline is T+1 day, meaning October 19. If the reversal is delayed beyond this prescribed deadline, compensation of ₹100 per day becomes payable for the delay.
For an ATM cash withdrawal that fails on October 18, the deadline is T+5, or October 23.
Are these calendar days or working days?
The September 2019 circular defines T by reference to the calendar date. A temporary COVID-19-related relaxation changed the applicable timeline to working days for a specified period. RBI's May 21, 2021 circular extended that relaxation prospectively until December 30, 2021.
The temporary relaxation has expired. Therefore, the framework currently uses calendar days, rather than excluding weekends and bank holidays, for calculating the prescribed TAT.
What should customers do if the refund is delayed?
Customers should first check their transaction status and contact their bank or payment service provider if the amount is not reversed within the applicable deadline. Under RBI's framework, eligible compensation must be credited automatically.
If the customer does not receive the required resolution, they can lodge a complaint under the RBI Integrated Ombudsman Scheme.