Failed UPI Transfer, Skimming Loss and the Ombudsman Clock
Meera, a salaried customer of a semi-urban branch, raises three issues in one complaint. First, a UPI transfer of 18,000 rupees was debited from her account on 3 February and never reached the beneficiary; the branch reversed the amount only on 28 February. Second, on 5 March she received an SMS about a 40,000 rupee ATM withdrawal at a mall she had never visited; she telephoned the branch the same day and filed a written dispute on 10 March, and the bank's investigation is still open. Third, she wrote to the branch on 20 March demanding compensation for both episodes; the branch has not replied. On 10 April she tells the Branch Manager she will go to the RBI Ombudsman the next day, and asks why the bank is not automatically paying her 100 rupees per day. The failed-transaction register shows that no suo motu compensation was credited in either case, and the branch has not told her the outcome of the ATM investigation.
1. Advise the branch on Meera's entitlement in each of the two transaction episodes. Show the reasoning, and state the assumptions you rely on.
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Episode 1 - failed UPI transfer (3 February, reversed 28 February). RBI's harmonisation-of-TAT framework for failed transactions requires the bank to auto-reverse a failed transaction within the prescribed turnaround time for that channel, and to pay compensation of 100 rupees per day for the delay beyond that TAT, credited automatically without the customer asking. Taking the applicable TAT for UPI as T+1 day (4 February), the delay runs from 5 February to 28 February inclusive - 24 days - giving 24 x 100 = 2,400 rupees, over and above the 18,000 rupee refund already made.
The failure here is procedural and worse than the money: the register shows the compensation was never credited suo motu. That is a system gap (no flag on the reversal file), not a discretionary call, and the branch should credit it and fix the flag rather than argue.
Episode 2 - unauthorised ATM withdrawal (5 March, reported 10 March). Where a customer's account is debited by a third-party breach and the customer notifies the bank within three working days, the customer's liability is nil; the burden of proving the transaction was authorised lies on the bank. Five days with a weekend in between is within the three-working-day window, so the branch must make good the 40,000 rupees unless it can positively establish Meera's complicity - an open investigation is not a finding, and silence is not an answer.
Assumption stated openly: the exact TAT figure should be checked against the current RBI master direction before the compensation is computed.
2. On 10 April Meera says she will approach the RBI Ombudsman the next day. Is her complaint admissible then? Set out the correct timeline and what she can realistically claim.
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Admissibility - not yet. Under the Reserve Bank Integrated Ombudsman Scheme, 2021, the complainant must first approach the regulated entity and may escalate only if the entity does not reply within 30 days of receiving the complaint, or if the reply is unsatisfactory. Meera's written complaint reached the branch on 20 March; the 30-day window closes on 19 April. A complaint filed on 11 April would be premature and liable to be returned, which would cost her weeks.
Correct sequence. Wait until 20 April (or until the bank replies, whichever is earlier); then file with the Ombudsman, and in any event within one year of the bank's reply or of the expiry of the 30-day period. Once admitted, the Ombudsman is expected to facilitate resolution within 30 days of receipt, extendable by a further 30 days.
What she can claim. (a) The 2,400 rupees of failed-transaction compensation, which the bank owes regardless of the Ombudsman; (b) refund of the 40,000 rupees on the zero-liability ground; (c) compensation for loss of time and harassment, which the scheme permits in addition to the amount involved, subject to the scheme's caps. The Ombudsman's award is binding on the bank to the extent it conforms to the scheme; the customer retains the option of other remedies.
Branch action: reply in writing before 19 April. A one-paragraph reply that concedes the 2,400 rupees and states the ATM position removes the escalation entirely - and is cheaper than the award plus the complaint-handling cost.
3. Beyond paying Meera, what process failures do these facts reveal, and which two would you fix first?
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Failures visible in the file.
- No suo motu compensation flag. Two episodes, zero compensation credited. The reversal process closes the principal but ignores the penalty leg, so the bank is in breach on every delayed case even when the customer says nothing.
- Failed-transaction reconciliation is manual or absent. A UPI debit on 3 February sat unreversed for 25 days; automated reversal files should have caught it within a day.
- No closure communication on disputes. A written dispute of 10 March had no outcome letter by 10 April. Customers escalate when they are kept in the dark, not only when they are out of pocket.
- No ageing dashboard. Nobody noticed that a complaint was about to hit the 30-day mark.
Fix first: (a) the auto-reversal and auto-compensation rule at the system level, because it is the failure with the largest unseen population - Meera is simply the one who complained; and (b) a complaint acknowledgement-plus-closure letter with a 30-day ageing report reviewed weekly by the Branch Manager, because it defuses the Ombudsman route at near-zero cost.
Judgement note: compensating Meera under protest or only after she threatens escalation converts a 2,400 rupee system fix into a conduct-risk finding. The right sequence is credit, apologise, then fix the process.