A consumer court in New Delhi has ordered Bank of India to compensate a woman for a failed ATM transaction, highlighting the importance of adhering to RBI guidelines for prompt reversals and customer service.
Key Points
- Consumer court directs Bank of India to refund Rs 10,000 for a failed ATM transaction.
- The court cited deficiency in service for the bank’s failure to reverse the amount promptly.
- RBI guidelines mandate banks to reverse failed ATM transactions within five days, with compensation for delays.
- The complainant experienced mental agony and harassment due to the wrongful debit of money.
- Bank of India must pay compensation for delayed reversal, mental agony, and litigation expenses.
A consumer court here has directed a bank to refund Rs 10,000 to a woman and pay additional compensation and litigation costs after a failed ATM transaction amount was not reversed for several months.
The bench comprising President Divya Jyoti Jaipuriar and Member Rashmi Bansal of the District Consumer Disputes Redressal Commission held the Bank of India guilty of deficiency in service for failing to reverse the amount to the complainant despite the cash not being dispensed from the ATM.
RBI Guidelines on ATM Reversals
In an order dated May 22, the Commission said, “RBI guidelines regarding compensation for delayed reversal are intended not merely to ensure expeditious resolution of grievances relating to failed ATM transactions and prompt reversal of customer funds, but to compensate the customer so that bank’s accountability be fixed against casual handling of failed ATM transaction complaints by banks.”
Complainant Chanda, a resident of Jahangirpuri in north Delhi, had attempted to withdraw Rs 10,000 on May 26, 2022, from an ATM of Union Bank of India. While the ATM transaction was declined and no cash was dispensed, the amount was debited from her account maintained with Bank of India.
The complainant approached the bank and lodged a complaint on June 7, 2022, seeking a reversal of the amount. However, despite repeated representations, the money was not credited back to her account.
Court’s Observations and Directives
The commission noted that both banks failed to appear before it despite service of notice and were proceeded against ex parte.
Relying on RBI guidelines governing failed ATM transactions, the commission observed that banks are required to reverse such failed transactions within five days, failing which compensation of Rs 100 per day is payable to the customer for the delay.
“The said RBI guidelines clearly provide that in cases where the account of the customer is debited but cash is not dispensed from the ATM, the responsibility for resolution and compensation lies upon the card issuing bank, irrespective of whether the transaction was attempted at the ATM of another bank,” the commission said.
The bench said the complainant’s grievance was lodged within the prescribed period under RBI norms and remained unrebutted as the banks failed to produce any evidence showing that cash had actually been dispensed or that the amount was later reversed.
Compensation and Penalties Imposed
“The hardship caused to a consumer due to wrongful debit of money from a bank account cannot be ignored,” the commission observed, adding that a customer approaches a bank with trust and confidence that their money will remain secure and any failed ATM transaction would be promptly rectified.
The commission directed the Bank of India to refund Rs 10,000 to the complainant, pay Rs 20,400 as compensation calculated at Rs 100 per day for delayed reversal, Rs 10,000 for mental agony and harassment, and Rs 8,000 towards litigation expenses.
It further ordered that the amount be paid within 30 days, failing which it would attract interest at the rate of 9 per cent per annum till realisation.
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