India's central bank Reserve Bank of India (RBI) has asked banks to pay account holders a compensation of Rs.100 per day if they delay in re-crediting the amount of a failed ATM transaction beyond 12 days.
"It is mandatory for the banks to reimburse the customers, the amount wrongfully debited on account of failed ATM transactions within a maximum period of 12 working days," the RBI said in a notification.
It also made it compulsory for banks to re-credit customer's account automatically on the 12th day after the failed transaction, without the customer having to make a claim, and told banks to extend the scope of audit to cover cases of delay in reimbursing the customers in these cases.
RBI said it has received complaints against banks violating its instructions and different banks had put in place different cut-off limits for cash withdrawals for other bank customers.
If the banks fail to do so in the stipulated period, they would have to pay a fine of Rs.100 per day from the 13th day onwards, said the notification. The penalty amount will also be credited on the same day when the bank pays back the debited amount for the failed ATM transaction to the customer, the notification said.
The RBI notification also said that the issuer bank is entitled to claim such compensation from the acquirer bank, if the later is responsible for the delay. Also, the ATM network operators will have to compensate the banks for any delay on their part.