Banks to pay compensation for ATM errors

Banks to pay compensation for ATM errors


In a circular issued late evening on Friday, the Reserve Bank of India (RBI) has imposed stringent penalties on banks who fail to reverse a transaction where cash is not dispensed by the ATM but the customer’s account gets debited within 12 days.

The circular was in response to complaints from customers who had to put up with delays in getting back money erroneously debited during failed ATM transactions.   
Besides, the compensation should 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, RBI said.

Third-party delay
The apex bank makes it clear that in case the delay is because of a third-party bank ATM through which the customer has transacted, the card-issuing bank must still pay the penalty to the customer.

However, it will recover this amount from the bank that owns the ATM.
Similarly, if a non-bank network operator is the reason behind the delay, the bank will make the payment and recover the penalty from the operator.
Further, the RBI has instructed banks to extend the scope of concurrent audit to cover cases of such delays.

Quarterly review
Accordingly, the banks are now also required to place a quarterly review of ATM transactions with its board of directors, indicating the quantum of penalties paid, reasons for the same, and the remedial action taken to prevent recurrence of such cases.
A copy will have to be forwarded to the central bank.

That apart, RBI has taken a critical note of different banks setting different cutoff limits for permitting cash withdrawals from/for other bank customers.

Liked the story?

  • 0

    Happy
  • 0

    Amused
  • 0

    Sad
  • 0

    Frustrated
  • 0

    Angry