Summary of this article
Consumer commission orders refund over failed ATM transaction
Bank directed to pay compensation for delayed reversal
RBI rules cited in consumer court compensation order
The District Consumer Disputes Redressal Commission in Delhi has directed Bank of India to refund Rs 10,000 to an individual after a failed ATM transaction, and also pay compensation, litigation costs, and damages for mental agony.
Failed ATM Transaction Led To Complaint
In its order dated May 22, 2026, the Commission held the bank guilty of “deficiency in service” for failing to reverse the amount debited from the complainant’s account despite no cash being dispensed from the ATM.
The Bench, comprising president Divya Jyoti Jaipuriar and member Rashmi Bansal, observed that Reserve Bank of India (RBI) guidelines on failed ATM transactions are intended not only to ensure speedy grievance resolution, but also to fix accountability on banks for delays in handling customer complaints.
Chanda, a resident of Jahangirpuri in north Delhi, tried to withdraw Rs 10,000 from a Union Bank of India ATM on May 26, 2022. The transaction failed and cash was not dispensed, but the amount was deducted from her Bank of India account.
On June 7, 2022, Chanda submitted a written complaint to Bank of India seeking for money to be debited back. But her money could not be credited back despite repeated requests.
RBI's Guidelines On Failed Transactions
Both banks received the Commission's notice but did not appear before the Commission. Consequently, the case was heard ex parte.
Referring to RBI rules on failed ATM transactions, the Commission observed that banks are required to reverse such debits within five days. If the amount is not reversed within the prescribed period, customers are entitled to compensation of Rs 100 per day for the delay, according to a report in LiveLaw.
In its order, the Commission said the responsibility to resolve the issue and compensate the customer lies with the card-issuing bank, even if the transaction was attempted at another bank’s ATM.
The Bench also observed that the complainant had filed her grievance within the period allowed under RBI norms. Since the banks failed to submit any evidence proving that cash had been dispensed or that the amount had been reversed later, the complaint remained unrebutted.
Commission Awards Compensation
“The hardship caused to a consumer due to wrongful debit of money from a bank account cannot be ignored,” the Commission observed in its order. It also added that customers place trust in banks with the expectation that failed transactions will be addressed promptly.
The Commission has directed Bank of India to refund Rs 10,000 to the complainant, and pay Rs 20,400 as compensation for delayed reversal, calculated at Rs 100 per day. It also ordered the bank to pay Rs 10,000 for mental agony and harassment and Rs 8,000 towards litigation expenses.
The order further said that if the payment was not made within 30 days, the amount would attract interest at the rate of 9 per cent per annum until realisation.
