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Consumer focus

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india Updated: Jul 18, 2009 23:54 IST

Here is good news for victims of malfunctioning ATMs. As per the new RBI directive, banks which do not reimburse within 12 working days, amounts wrongfully debited due to failed ATM transactions, have to pay the consumer Rs 100 per day compensation.

This should particularly gladden the heart of 80-year-old Mr Atma Ram.

On June 20, 2008, he tried to withdraw Rs 500 from the ATM of a bank with which he has been banking for the last two decades. The machine dispensed no money, but the amount was deducted from his account. Till today, the bank has not refunded the amount.

I quote here his expression of disillusionment: “The institution of banking...seems to have frozen its conscience at some inhuman level…”

Says Mr Sarabjit Singh Devgun:
On July 25, 2008, I withdrew Rs 17,000 from an ATM, but the bank has deducted Rs 42,000 and is not refunding the excess amount of Rs 25,000 debited. How do I get back my money? Where do I complain?

The Reserve Bank of India (RBI) has toughened its stand against banks which are not complying with its directives of October 23, 2008 and February 11, 2009, asking all banks to reimburse within 12 working days from the receipt of the complaint, any money wrongfully deducted from the accounts of customers following failed ATM transaction.

In a new circular issued on July 17, the RBI has said that banks that fail to re-credit the amount within 12 days
shall pay a compensation of Rs 100 per day to the aggrieved consumer.

The compensation shall be credited to the customer's account automatically without any claim from the customer, on the same day when the bank affords the credit for the failed ATM transaction. Non-adherence to this shall attract penalty under the Payment and Settlement Systems Act 20007.

So (a) quote these RBI directives and ask the bank to comply. (b) Also complain to the RBI about the violation of its directive (you can complain online).

If the bank still does not refund the amount, you can seek redress through either the Banking Ombudsman or the consumer court. You can get the email IDs of Banking Ombudsmen on the RBI website (

In such cases, the bank would be guilty of deficiency in service on three counts: (a) for the ATM's failure to dispense money (b) For wrongly debiting the amount from your account and (c) for failure to redress your complaint. You can seek refund, compensation and costs of litigation.

Do you have any problems? Send in your queries to