Reserve of Bank of India tightens norms for banks up penalties

Highlights:

  • 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.
  • 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.