India’s Reserve Bank of India (RBI) does not use one compensation schedule for every delayed banking service. Its main compensation framework covers domestic failed transactions carried through authorised payment systems. The governing instrument is RBI Circular RBI/2019-20/67, DPSS.CO.PD No.629/02.01.014/2019-20, issued on September 20, 2019 and effective from October 15, 2019. For listed failures that are not the customer’s fault, the payment must be reversed or resolved within a rail-specific turnaround time (TAT). Where the annex prescribes compensation, the regulated entity must generally credit ₹100 for each day beyond the deadline, automatically and without waiting for a claim.
The amount and deadline depend on what happened: an ATM that debited an account but did not dispense cash is treated differently from a UPI transfer in which the beneficiary was not credited, and both differ from a merchant payment with no confirmation. The framework is limited to domestic transactions in which the originator and beneficiary are in India; it is not a universal remedy for slow loan processing, cheque-service delays or every account complaint.
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What the RBI compensation framework covers—and what it does not
The 2019 circular harmonises turnaround times and customer compensation for failed transactions using authorised payment systems. A failed transaction is one that was not fully completed for a reason not attributable to the customer. RBI gives examples such as a communication-link failure, an ATM running out of cash, or a session timeout. The annex also covers some beneficiary-credit failures caused by incomplete or improper information when reversal is not initiated promptly.
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The circular applies to domestic transactions where both the originator and beneficiary are in India. In this context, “bank” includes non-bank entities wherever they are authorised to operate the relevant payment system. A customer-attributable error is outside the stated failed-transaction definition, and the circular does not create an automatic payment for every type of banking delay.
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Services that are not automatically covered by the ₹100 rule
The ₹100-per-day figures are rows in the failed-payment annex, not a general tariff for banking complaints. The circular does not establish one universal amount for a loan application that took too long, a delayed cheque service, a slow account opening, or an unresolved service request. Those matters may be governed by other regulations, product terms or the bank’s grievance process, but they should not be presented as entitlements under this particular annex.
Which circular governs the entitlement?
The primary instrument is RBI Circular RBI/2019-20/67, DPSS.CO.PD No.629/02.01.014/2019-20, titled “Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems.” RBI issued it on September 20, 2019, and made it effective on October 15, 2019.
The circular describes each prescribed TAT as the outer limit for resolving the relevant failure and directs banks, operators and other system participants to try to resolve failures sooner. Where financial compensation is due, it must be credited suo moto: the customer does not have to file a claim before the compensation is posted. The payment-system operator or participating institution remains responsible for applying the row that matches the incident.
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How to read the RBI time calculation
T is the calendar transaction date
The annex uses T for the transaction day. T means the calendar date on which the transaction occurred, not the date on which the customer first complained. A deadline expressed as T+1 or T+5 is therefore measured from that transaction date.
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R identifies when a reversal is complete
The annex uses R for the day on which reversal concludes and the funds are received by the issuer or originator. The issuer or originator should reverse the amount on the same day it receives the funds from the beneficiary end. This distinction matters when a payment moves between several participants: the date a participant sends money is not necessarily the date on which the customer has received the completed reversal.
A deadline for returning the debit is separate from compensation
The first obligation is to return or resolve the failed debit within the applicable TAT. Compensation is an additional amount for delay beyond that TAT where the annex specifies it. Receiving the original money back does not erase a compensation obligation that arose because the reversal was late.
RBI deadlines and compensation by payment type
The following rows reproduce the incidents and amounts set out in the circular’s annex. Match the actual failure—not merely the fact that an account was debited—to the relevant row.
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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstall| Payment rail and incident | Reversal or resolution deadline | Compensation for delay |
|---|---|---|
| ATM or Micro-ATM: account debited but cash not dispensed | Proactive reversal within T+5 days | ₹100 per day beyond T+5, credited to the account holder |
| Card-to-card transfer: debit made but beneficiary card not credited | Reverse by T+1 day if beneficiary credit is not effected | ₹100 per day beyond T+1 |
| Card-present PoS, including cash at PoS: account debited but no merchant confirmation or charge slip | Auto-reversal within T+5 days | ₹100 per day beyond T+5 |
| IMPS transfer: account debited but beneficiary not credited | If credit cannot be made, the beneficiary bank auto-reverses by T+1 day | ₹100 per day beyond T+1 |
| UPI funds transfer: account debited but beneficiary not credited | If credit cannot be made, the beneficiary bank auto-reverses by T+1 day | ₹100 per day beyond T+1 |
| UPI merchant payment: debit made but merchant confirmation not received | Auto-reversal within T+5 days | ₹100 per day beyond T+5 |
| Aadhaar Enabled Payment System merchant incident: debit made but merchant confirmation absent | Acquirer initiates a credit adjustment by T+5 days | ₹100 per day beyond T+5 |
| Aadhaar Payment Bridge System: beneficiary credit delayed | Beneficiary bank reverses within T+1 day | ₹100 per day beyond T+1 |
| NACH: beneficiary credit delayed or amount reversal delayed | Beneficiary bank reverses the uncredited transaction within T+1 day | ₹100 per day beyond T+1 |
| NACH: debit made after the customer revoked the mandate with the bank | Resolution within T+1 day | Not stated in the RBI annex row |
| PPI off-us transaction | The rule for the underlying UPI, card-network or IMPS rail applies | Depends on the underlying rail |
| PPI on-us transaction: beneficiary PPI not credited or merchant confirmation absent after debit | Reversal in the remitter’s account within T+1 day | ₹100 per day beyond T+1 |
The ₹100 figure is a daily amount. It starts only after the applicable T+1 or T+5 outer limit has passed, and only for a row that specifies compensation. The annex does not support moving the T+5 rule from one type of payment to another.
Who must reverse the money, and who receives compensation?
The responsible participant depends on where the failed payment sits in the chain. In several credit-push transactions, the beneficiary bank must return the money when it cannot credit the beneficiary. For a debit that reached the originator but was not completed at the other end, the institution handling the failed leg performs the auto-reversal or adjustment described in the row.
The circular’s logic also distinguishes the person who should receive compensation. When a credit-push transfer was debited from the originator but not credited to the beneficiary within the prescribed time, the penalty generally goes to the beneficiary. If the originator bank delayed initiating the reversal, the penalty goes to the originator. This prevents a generic assumption that the person who first sees a debit is always the compensation recipient.
Examples of how the deadlines work
ATM debit with no cash
Suppose an ATM debits an account on the date T but dispenses no cash. The bank must proactively reverse the debit within T+5 days. If the reversal occurs later, the account holder is entitled to ₹100 for each day after T+5 under that annex row, in addition to the returned amount.
UPI transfer to another person
If a UPI funds transfer debits the sender but the beneficiary is not credited, the beneficiary bank must auto-reverse by T+1 when it cannot complete the credit. A late reversal attracts ₹100 per day beyond T+1 under the specified UPI transfer row. This is different from a UPI purchase at a shop or website.
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UPI merchant payment without confirmation
For a UPI merchant payment where the account is debited but the merchant confirmation is not received, the annex provides an auto-reversal within T+5 days and ₹100 per day beyond that period. The absence of merchant confirmation is the defining event in this row; it should not be treated as the same incident as a person-to-person beneficiary not being credited.
Card-present PoS transaction
Where a card-present PoS transaction, including cash at PoS, debits the account but produces no merchant confirmation or charge slip, the stated outer limit is T+5 days. A delay after that limit attracts ₹100 per day under the card-present row.
NACH debit after mandate revocation
If a customer revoked a NACH mandate with the bank and a debit nevertheless occurred, the annex calls for resolution within T+1 day. The cited row does not state a compensation amount, so the ₹100 rate from other NACH rows cannot be imported into this case.
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For an off-us PPI transaction, the underlying UPI, card-network or IMPS rule controls the deadline and compensation. For an on-us PPI transaction in which the beneficiary PPI is not credited or merchant confirmation is absent after a debit, the annex gives a T+1 reversal and ₹100 per day beyond T+1.
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What the annex does not establish for card-not-present e-commerce
The annex lists a card-not-present e-commerce debit without confirmation, but the displayed row does not provide a readable timeline or compensation entry for that incident. It would be unsafe to copy the T+5 deadline from the neighbouring card-present PoS row. A customer should identify the card-not-present case separately with the issuer and ask for the currently applicable rule rather than assume a deadline or amount that the cited row does not state.
What customers should do when a payment fails
RBI’s framework is designed to operate automatically, but accurate identification of the transaction helps the bank apply the correct row. Use this sequence:
- Name the rail and failure precisely. Record whether it was an ATM or Micro-ATM cash-not-dispensed event, a card transfer, a card-present PoS payment, an IMPS or UPI funds transfer, a UPI merchant payment, an Aadhaar-enabled payment, an APBS credit, a NACH entry, or a PPI transaction. Also record what happened after the debit: no cash, no beneficiary credit, no merchant confirmation, or another event.
- Record the transaction date and identifiers. Keep the calendar date T, amount, account or wallet involved, transaction reference or trace number, and the bank alert or account statement. Note the date on which any reversal or credit actually arrived. These details help establish the T+1 or T+5 calculation; they are practical evidence, not a special documentation list imposed by the circular.
- Check the applicable outer limit. Compare the incident with the annex row. Do not use a UPI merchant deadline for a UPI person-to-person transfer, or an ATM deadline for a card-not-present purchase.
- Check both the returned amount and compensation. A reversal returns the debited principal. Where the row specifies compensation, calculate the days after its TAT and check whether ₹100 per day was credited separately or alongside the reversal.
- Contact the bank or relevant payment operator if the entry is missing. Provide the reference number and ask which annex category the institution applied, the date on which it received funds from the other participant, and when it completed reversal. Ask for a written response if the automatic credit is not visible.
The circular says that applicable financial compensation is credited automatically, without waiting for a complaint or claim. Filing a service request can help trace a missing entry, but the request is not what creates the compensation obligation.
Escalating a missing reversal or compensation
If the institution does not provide the redress required by the applicable TAT, the circular identifies the Reserve Bank – Integrated Ombudsman Scheme as the complaint route. The scheme’s procedure can change, so check the current RBI instructions before filing, including any requirement to first complain to the regulated entity and wait for the prescribed response period.
When escalating, present a short chronology: transaction date T, payment rail, exact failure, the relevant T+1 or T+5 deadline, date of reversal (if any), compensation expected under the row, and the bank’s response. Attach the statement or alert and correspondence. Keep the request focused on the failed-transaction TAT and the automatic compensation that the annex actually specifies.
Important limits before you claim compensation
- Domestic scope: the framework is for transactions in which both originator and beneficiary are in India. Do not assume the same TAT applies to a cross-border payment.
- Customer responsibility: the circular addresses failures not attributable to the customer. A wrong instruction, unauthorised action by the customer, or other customer-caused event may fall outside the definition.
- Correct incident category: deadlines vary by rail and by post-debit outcome. The fact that an account shows a debit is not enough to select a row.
- Principal versus penalty: getting the original amount back is the reversal; the daily amount is compensation for a late resolution where specified.
- Automatic does not mean universal: compensation is automatic only where the applicable annex row provides it. The NACH mandate-revocation row, for example, states a T+1 resolution but no amount in the cited annex.
- Current procedure: the circular took effect in 2019, and the Ombudsman Scheme may be amended. Confirm the current complaint process and any later instructions that apply to your transaction date.
Bottom line for a delayed banking payment
Start with the payment rail and the precise failure, then count from T, the calendar transaction date. Under the listed RBI rows, many failed transfers must be reversed by T+1 and several cash, PoS and merchant-confirmation failures by T+5. Where the row provides compensation, the customer should receive ₹100 per day after that outer limit automatically. The framework is powerful for covered domestic failed transactions, but it is not a blanket compensation promise for every delay in banking services.
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