Failed ATM transaction: Bank must repay in 7 days

The Reserve Bank of India on Friday directed banks to reimburse customers for amounts wrongfully debited from their accounts in failed ATM transactions within seven days of an account holder's complaint or else pay a Rs 100 per day compensation.

"The time limit for resolution of customer complaints by the issuing banks shall stand reduced from 12 working days to seven working days from the date of receipt of customer complaint," the RBI said in a notification.

Failure to re-credit the amount within seven working days will require the issuing bank to pay a compensation of Rs 100 per day, it said.

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Earlier, banks were required to reimburse customers for amounts wrongfully debited from their accounts in failed ATM transactions within 12 days.

The RBI further said that all customers are entitled to receive such compensation for delays only if a claim is lodged with the issuing bank within 30 days of the date of transaction.

The directive shall be come into effect from July 1, 2011.

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The central bank instructed the issuing bank and the acquiring bank to settle failed ATM transaction disputes through the ATM system provider only.

"No bilateral settlement arrangement outside the dispute resolution mechanism available with the system provided is possible," RBI said.

This measure is intended to reduce instances of disputes in payment of compensation between the issuing and acquiring banks, it added.