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Failed ATM, debit card

transactions: New rules explained
in 5 points
2 min read Join us
12 Oct 2019, 08:46 AM IST

Surajit Dasgupta

A failed ATM or debit card transaction is one which

has not been completed due to any reason not
attributable to the customer
The RBI has specified compensation if the failed
transactions are not reversed within a specified
period

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Failed ATM transaction: The financial institution has to

reverse transaction within a maximum of transaction date
+ 5 days

Customer’s bank account debited but cash

not dispensed at ATMs. Debit card account
debited but the beneficiary card account not
credited. For the benefit of bank account
holders, the Reserve Bank of India or RBI
has put in place new rules for such failed
transactions, outlining the turnaround time
(TAT) for resolution of such customer
complaints and compensation guidelines in
case there is a delay in reversing the failed
transaction.
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A failed transaction is a transaction 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.

1) Failed ATM transactions: According to

the RBI’s new guidelines, in case of ATM
transactions where customer’s account has
been debited but cash not dispensed, the
financial institution have to reverse the failed
transaction within a maximum of transaction
date (T) + 5 days. If the financial institutions
fail to reverse the transaction in T+5 days,
they have to pay a compensation of ₹100
per day of delay beyond T + 5 days to the
credit of the account holder.
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2) This new framework for auto-reversal of

failed transaction and compensation also
applies to failed transactions at micro-ATMs,
OPEN IN APP
which are basically low-cost devices that
support basic banking transactions through
biometric authentication.

3) In case of failed debit card to debit card

transfer where the customer’s card account
has been debited but the beneficiary card
account not credited, the financial
institutions have to reverse the transaction
within within T + 1 day. If the transaction is
not reversed or if amount is not credited to
the beneficiary account within this time
period, ₹100 per day compensation has to
be paid for delay beyond T + 1 day.

4) At point of sales (PoS) debit card

transactions, including cash at PoS, if the
customer’s account has been debited but
confirmation not received at merchant
location (charge-slip not generated), the
transaction has to auto-reversed within T + 5
days. Otherwise, a compensation ₹100 per
day of delay beyond T + 5 days has to be
paid.
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5) This same rules applies to failed

transaction at card not present (CNP) or e-
commerce transactions.

Also, in case of failed IMPS transaction, if

the account has been debited but the
beneficiary account is not credited, auto-
reversal has to done by the bank by T + 1
days. Otherwise, compensation of ₹100 per
day has to be paid.

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