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Had a failed financial transaction? By when shall bank reverse the amount?

Transferring funds to another account but transaction failed? Withdrawing cash at ATM but cash not received? Executing an online purchase but the payment page timed out? By when shall the bank reverse the amount debited from your account? Reserve Bank of India (RBI) has prescribed the Turn Around Time (TAT) for such failed transactions.

What is Turn Around Time (TAT)?

TAT is the timeline by which the banks shall reverse the amounts involved in failed financial transactions to the customer’s account. 

What is failed transaction?

A ‘failed transaction’ is a transaction –

  1. 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. 
  2. Wherein amount could not be credited to the beneficiary account due to lack of full information or lack of proper information or delay in initiating a reversal transaction.

What is TAT for various transactions?

As per the RBI circular on ‘Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems’ dated September 20, 2019, the TAT for various transactions are as follows –

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. T + 5 days ₹ 100/- per day of delay beyond T + 5 days
2 Card Transaction
a Card to card transfer
Card account debited but the beneficiary card account not credited. 		T + 1 day ₹ 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. 		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. 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). 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). 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. 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. 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. 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. T + 1 day
8 Prepaid Payment Instruments (PPIs) – Cards / Wallets
a Off-Us transaction
The transaction will ride on UPI, card network, IMPS, etc. TAT and compensation rule of respective system shall apply.
b On-Us transaction
Beneficiary’s PPI not credited.
PPI debited but transaction confirmation not received at merchant location. 		T + 1 day ₹100/- per day if delay is beyond T + 1 day

T – the day of transaction.

What are other features of TAT framework?

  • Only the domestic transactions wherein both the originator and beneficiary are within India are covered under TAT framework.
  • If TAT is not adhered to by the banks, the customers can raise a complaint with the RBI Ombudsman under Integrated Ombudsman Scheme, 2021. 


References

Reserve Bank of India. (2019, September 20). 'Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11693


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  1. Trisha Kr MadhuFebruary 17, 2023 at 7:53 AM

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