RBI’s TAT Harmonization Rule

On September 20, 2019, the RBI introduced a circular aimed at standardizing the Turn Around Time (TAT) for transaction reversals and customer compensation. According to this rule, banks are obligated to return the debited amount within a specified time frame after a transaction fails. If they do not, they face daily penalties until the refund is processed.

When Is the Penalty Applicable?

The penalty applies when the failed transaction was beyond the customer’s control. The type of transaction determines the timeline for reversal and potential penalties:

• ATM Withdrawals: If money is debited but cash is not dispensed, the bank must reverse the amount within 5 days. Failure to do so results in a Rs 100 daily penalty.
• Card-to-Card Transfers: If a card-to-card transfer fails but money is deducted, the bank has two days (T+1, including the transaction day) to refund. Beyond this, Rs 100 per day is charged as a penalty.
• PoS, IMPS, UPI Transactions: If funds are deducted during Point of Sale (PoS), IMPS, or UPI transactions but not credited to the recipient, the bank has one day (T+1) to reverse the amount. A daily penalty is incurred from the following day if this fails.

What Can You Do?

If you’ve experienced such a transaction failure and the bank hasn’t reversed the funds in the stipulated time, you can approach the bank to claim the penalty. Familiarizing yourself with these RBI rules ensures you know your rights as a customer and can hold banks accountable for delays in refunding your money.

For more details on these regulations, refer to the official RBI guidelines.

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11693