RBI Mandates Banks to Refund Failed ATM/UPI Payments Within 7 Days — ₹100 Daily Penalty for Delays
In this digital age, where online transactions and cashless payments are the norm, failed payments can cause major frustration. Whether you're withdrawing cash from an ATM or transferring money through UPI, it’s not uncommon for the amount to get debited from your account even when the transaction doesn't go through.
To protect consumers from financial loss, the Reserve Bank of India (RBI) has laid out clear rules ensuring banks refund the money promptly and compensate for unnecessary delays.
🏦 What Happens If Your Money Is Deducted But the Transaction Fails?
Common scenarios include:
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ATM cash not dispensed but your account shows a deduction.
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UPI or online transaction fails, yet the money is debited.
In both cases, the bank is fully responsible for returning your money — and doing so within a specific time frame set by RBI.
⏳ RBI’s 7-Day Refund Rule
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Banks must refund the deducted amount within 7 working days of receiving your complaint.
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The rule applies to all banks — public and private.
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The 7-day window excludes weekends and official holidays.
💸 Missed Deadline? Bank Pays ₹100 Per Day as Compensation
If the refund isn’t processed within 7 working days:
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The bank must pay you ₹100 for every additional day of delay.
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This compensation is valid only if the complaint is filed within 30 days of the failed transaction.
Missing this 30-day window will disqualify you from receiving compensation, although the bank is still expected to process the refund.
📝 What Should You Do After a Failed Transaction?
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Immediately contact your bank’s customer care or visit the nearest branch.
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Provide proof of the transaction — such as an SMS alert, ATM receipt, or bank statement.
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If the bank delays the refund, fill out the Annexure-5 form to escalate the issue.
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This form is available both on the bank’s website and at branches.
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Once submitted, your compensation starts accumulating from that day.
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✅ Key RBI Rules to Remember
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Refund Timeframe: 7 working days after lodging a complaint.
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Compensation: ₹100/day if refund is delayed beyond 7 days.
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Complaint Deadline: Must be filed within 30 days of the failed transaction.
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Proof Needed: Keep a record of the failed transaction (receipt, SMS, or statement).
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Escalation: Use Annexure-5 form if the refund is delayed.
🧠 Final Thoughts
Failed digital payments shouldn’t cost you peace of mind. With RBI’s protective regulations in place, you can rest assured that your money is safe and your rights are protected. Make sure to act fast, keep documentation handy, and escalate when needed.
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