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Banks Must Pay Rs. 100 per day for Delayed Reversal of Failed ATM Transactions


Moneylife has a story of how a customer got Rs. 1000 taken from his account even though his ATM transaction failed and he used RTI to get Bank of India, his bank, to pay a penalty prescribed by the RBI as Rs. 100 per day. The banks get 12 days from the ATM failure/complaint to reverse the transaction, and any further delays has Rs. 100 per day.

It’s quite exemplary that Mr. Phadke, the customer concerned, used RTI to get information on such accounts: 53 people had seen ATM failures, and only 4 complaints were registered.

Just as important is that you can go to the RBI Banking Ombudsman instead. In fact, in last year’s report, this is this case:

7. ATM withdrawal : Penalty for delayed reversal of wrong debit: The complainant maintained an account with AB Bank. He withdrew an amount of ` 500 from the ATM of DH bank on July 28, 2009. The cash dispensed by the machine was only ` 400. However, his account was debited by ` 500/-. The amount of ` 100/- was credited back to his account only on January 27, 2010 despite lodging the complaint immediately no penalty was paid to him as per the instructions issued by DPSS vide its circular dated July 17, 2009. Since the bank had delayed in affording the credit to the complainant’s account by more than five months, BO directed the bank to pay the penalty amount of ` 16, 200/- for the delayed period.


50. Failed ATM transaction : In a case of failed ATM transaction where the account was debited though no cash was dispensed it was observed that as per BO’s orders the amount was credited to complainant’s account, but the bank did not pay the penal interest in terms of extant RBI instructions for the delayed period credit of approximately 2 months. The bank was directed to pay penalty at ` 100/- per day amounting to ` 6500/-.

An RTI application may not work at the private banks (they are not subject to the RTI act) but you can use the Banking Ombudsman route to file your complaint. For this you first approach your bank; if they don’t address the issue in a month, you can file a complaint online with the Banking Ombudsman.


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