Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems

RBI/2019-20/67 DPSS.CO.PD No.629/02.01.014/2019-20 September 20, 2019 All Operators and Participants of Authorised Payment Systems Madam / Dear Sir, Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems Please refer to the Statement on Developmental and Regulatory policies issued as part of Monetary Policy statement dated April 4, 2019 wherein it was proposed that the Reserve Bank would put in place a framework on Turn Around Time (TAT) for resolution of customer complaints and compensation framework across all authorised payment systems. 2. It has been observed that a large number of customer complaints emanate on account of unsuccessful or ‘failed’ transactions. Failure could be on account of various factors not directly attributable to the customer such as disruption of communication links, non-availability of cash in ATMs, time-out of sessions, non- credit to beneficiary’s account due to various causes, etc. Rectification / Compensation paid to the customer for these ‘failed’ transactions is not uniform. 3. After consultation with various stakeholders, the framework for TAT for failed transactions and compensation therefor has been finalised which will result in customer confidence and bring in uniformity in processing of the failed transactions. The same is enclosed as Annex to this circular. भुगतान और िनपटान �णाली िवभाग, क��ीय कायार्लय, 14 वी मंिजल, क��ीय कायार्लय भवन,शहीद भगत �संह माग,र् फोटर्, मुम्बई - 400001 फोनTel: (91-22) 2264 4995; फैक्सFax: (91-22) 22691557; ई-मले e-mail : cgmdpssco@rbi.org.in Department of Payment and Settlement Systems, Central Office, 14th Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai - 4000014. It may be noted that : • the prescribed TAT is the outer limit for resolution of failed transactions; and • the banks and other operators / system participants shall endeavour towards quicker resolution of such failed transactions. 5. Wherever financial compensation is involved, the same shall be effected to the customer’s account suo moto, without waiting for a complaint or claim from the customer. 6. Customers who do not get the benefit of redress of the failure as defined in the TAT, can register a complaint with the Reserve Bank - Integrated Ombudsman Scheme, 2021 (as amended from time to time). 7. This directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007) and shall come into effect from October 15, 2019. Yours faithfully (P. Vasudevan) Chief General Manager Encl. : As aboveAnnex (Annex to Circular DPSS.CO.PD No.629/02.01.014/2019-20 dated September 20, 2019) Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems General Instructions covering the TAT : 1. The principle behind the TAT is based on the following : a. If the transaction is a ‘credit-push’ funds transfer and the beneficiary account is not credited while the debit to originator has been effected, then credit is to be effected within the prescribed time period failing which the penalty has to be paid to the beneficiary; b. If there is delay in initiation of a transaction at the originator bank’s end beyond the TAT, then penalty has to be paid to the originator. 2. 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. Failed transactions shall also include the credits which could not be effected to the beneficiary account on account of lack of full information or lack of proper information and delay in initiating a reversal transaction. 3. Terms like, Acquirer, Beneficiary, Issuer, Remitter, etc., have meanings as per common banking parlance. 4. T is the day of transaction and refers to the calendar date. 5. R is the day on which the reversal is concluded and the funds are received by the issuer / originator. Reversal should be effected at the issuer / originator end on the same day when the funds are received from the beneficiary end. 6. The term bank includes non-banks also and applies to them wherever they are authorised to operate. 7. Domestic transactions i.e., those where both the originator and beneficiary are within India are covered under this framework.Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems Sl. Description of the incident Framework for auto-reversal and compensation no. Timeline for auto-reversal Compensation payable I II III IV 1 Automated Teller Machines (ATMs) including Micro-ATMs a Customer’s account debited but Pro-active reversal (R) of failed ₹ 100/- per day of cash not dispensed. transaction within a maximum delay beyond T + 5 of T + 5 days. days, to the credit of the account holder. 2 Card Transaction a Card to card transfer Transaction to be reversed (R) ₹ 100/- per day of latest within T + 1 day, if credit delay beyond T + 1 Card account debited but the is not effected to the day. beneficiary card account not beneficiary account. credited. b Point of Sale (PoS) (Card Present) Auto-reversal within T + 5 ₹ 100/- per day of including Cash at PoS days. delay beyond T + 5 days. Account debited but confirmation not received at merchant location i.e., charge-slip not generated. 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 If unable to credit to ₹100/- per day if delay account is not credited. beneficiary account, auto is beyond T + 1 day. reversal (R) by the Beneficiary bank latest on T + 1 day. 4 Unified Payments Interface (UPI) a Account debited but the beneficiary If unable to credit the ₹100/- per day if delay account is not credited (transfer of beneficiary account, auto is beyond T + 1 day. funds). reversal (R) by the Beneficiary bank latest on T + 1 day. b Account debited but transaction Auto-reversal within T + 5 ₹100/- per day if delay confirmation not received at days. is beyond T + 5 days. merchant location (payment to merchant).Sl. Description of the incident Framework for auto-reversal and compensation no. Timeline for auto-reversal Compensation payable I II III IV 5 Aadhaar Enabled Payment System (including Aadhaar Pay) a Account debited but transaction Acquirer to initiate “Credit ₹100/- per day if delay confirmation not received at Adjustment” within T + 5 days. is beyond T + 5 days. merchant location. b Account debited but beneficiary account not credited. 6 Aadhaar Payment Bridge System (APBS) a Delay in crediting beneficiary’s Beneficiary bank to reverse the ₹100/- per day if delay account. transaction within T + 1 day. is beyond T + 1 day. 7 National Automated Clearing House (NACH) a Delay in crediting beneficiary’s Beneficiary bank to reverse the ₹100/- per day if delay account or reversal of amount. uncredited transaction within T is beyond T + 1 day. + 1 day. b Account debited despite revocation Customer’s bank will be of debit mandate with the bank by responsible for such debit. the customer. Resolution to be completed within T + 1 day. 8 Prepaid Payment Instruments (PPIs) – Cards / Wallets a Off-Us transaction The transaction will ride on UPI, card network, IMPS, etc., as the case may be. The TAT and compensation rule of respective system shall apply. b On-Us transaction Reversal effected in Remitter’s ₹100/- per day if delay account within T + 1 day. is beyond T + 1 day. Beneficiary’s PPI not credited. PPI debited but transaction confirmation not received at merchant location.