Reserve of Bank of India tightens norms for banks up penalties

Reserve of Bank of India tightens norms for banks up penalties

 Reserve Bank of India prescribed a turnaround time (TAT) for banks to settle failed transactions for customers and also notified compensations payable for various types of customer complaints. The financial compensation should be done suo motu by the bank, without waiting for a complaint or a claim by a customer.

Key highlights:

• The central bank had first announced a move to harmonise TAT this April for resolving customer complaints and compensation after observing that time taken for resolving customer complaint varies across payment systems.
• To have prompt and efficient customer service in all electronic payment systems it is necessary to harmonise the TAT of resolution of customer complaints and charge-backs and to have a compensation framework in place for the benefit of customers.
• The RBI categorised eight different avenues of transaction in which the new guidelines will be applicable, including ATMs, card transactions, immediate payment system, unified payment interface and prepaid cards.
• The timeline for auto-reversal has been set at between one day after the transaction to five days.
• The financial compensations have been set at Rs 100 per day if the reversal does not happen within a specified timeline.
• The move is aimed at upping customer confidence and bringing-in uniformity in processing of the failed transactions
• Customers who do not get the benefit of redress of the failure as defined in the TAT, can register a complaint to the banking ombudsman.