Banks Face Penalty for ATM Default
The Reserve Bank of India has decided to penalize banks which fail to reverse a transaction where cash is not dispensed by the ATM, but the customer’s account gets debited within 12 days.
Banks will now have to pay accountholders a sum of Rs 100 per day as compensation for every day of delay in reversing a failed ATM transaction, as per a RBI circular. Also, this amount needs to be credited on the day of the re-credit without the customer having to make a claim.
The circular states banks must re-credit such customers’ accounts within 12 working days from the date of receipt of the complaint.
In case of a third-party bank - as well as a non-bank network operator - ATM failure, the card-issuing bank must still pay the penalty to the customer. This amount can then be recovered from the bank which owns the ATM.
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