RBI Circular: Banks should pay penalty for every failed ATM Transaction !!!

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Gone are those days of standing in long lines to withdraw money. In every corner of the country there are ATM's of all major banks and the most illiterate persons also know how to use ATMs to withdraw cash, which is a boon in today's busy life.

But how many of us know about the rights and privileges we have regarding the usage of ATMs. There are many such things which even a highly educated man is not aware of and Banks are very happy to ignore them.

In the event of a failed ATM transaction and the amount being debited from a customer’s account, the bank must reimburse the customer within 12 days of such a complaint. Otherwise, as per the rules made by RBI, the bank is liable to pay a penalty. Hundreds of such cases go unnoticed as very few people are aware of such rules.

When we get a penalty for not maintaining sufficient balance in our Saving Accounts, why not Banks have to pay us penalty when they do not maintain enough cash in their ATM machines. Do you remember the times it happened when the amount is already debited from your account, and actually you have not received the cash?

Such issues have been comprehensively reviewed by the Reserve Bank of India and they gave the directives to all banks long back, through their circular dated 17 July 2009, under Section 18 of the Payment and Settlement Systems Act 2007, which states:

  • Banks are required to reimburse the customers, the amount wrongfully debited on account of failed ATM transaction within a maximum period of 12 days from the date of receipt of the customer's complaint.

  • For any failure to re-credit the customer’s account within 12 working days from the date of receipt of the complaint, the bank shall pay compensation of Rs.100 per day to the aggrieved customer. The compensation shall be credited to the customer’s account automatically, without any claim from the customer, on the same day when the bank affords the credit for the failed ATM transaction.

  • The issuer bank is entitled to claim such compensation paid to the customer from the acquirer bank if the delay is attributed to the latter. By the same logic, the ATM network operators shall compensate the banks for any delay on their part.

  • Each bank shall present a quarterly review of ATM transactions to its board of directors, indicating inter alia, the quantum of penalties paid, reasons thereof and the actions taken to avoid recurrence of such instances. A copy of the note along with observations of the board shall be forwarded to the chief general manager, Reserve Bank of India, Department of Payment & Settlement Systems, Mumbai.

Common guys, know your rights and use ATMs wisely.

Updated on 30-Jul-2019 22:30:24