RBI is concerned over delays in addressing chargeback issues
After the renewed security concerns at automated teller machines (ATMs), the Reserve Bank of India (RBI) has flagged a problem with chargeback — money debited from accounts without cash dispensation at the time of withdrawal. Delays in returning money for disputed transactions have also come under RBI’s scanner. The number of complaints about chargeback at ATMs are substantial, about 3,000 a day (or 90,000 a month), according to A P Hota, the National Payments Corporation of India (NPCI) managing director and chief executive. NPCI is a body set up as an umbrella institution for all retail payments in the country. Hota said NPCI and RBI were not happy at the state of affairs (number of instances and the dispute resolution process).
The incidence of chargeback complaints is about 0.031 per cent and it could be brought down to 0.010 per cent, according to NPCI’s estimates.
Acknowledging RBI’s concerns, Sangeet Shukla, senior advisor (risk) at Indian Banks’ Association (IBA), said incidence had come down in recent years. RBI’s worry is on three counts — customer grievances, system integrity and time taken (delays) to correct the transactions.
The ATM segment in India has grown at a compounded annual rate of 26.8 per cent over 2008-13. The number of ATM terminals reached nearly 114,000 by March 2013. Hota said it was 137,000 at end-October and the assessed requirement was 400,000.