RBI refund rules — what they actually cover
What the TAT framework actually says
In September 2019 the Reserve Bank of India issued Harmonisation of Turn Around Time (TAT) and Customer Compensation for Failed Transactions using Authorised Payment Systems. The circular standardises two things across UPI, IMPS, NEFT, debit cards, credit cards, prepaid payment instruments and BBPS:
- The maximum turn-around-time within which a failed transaction must be auto-reversed.
- The compensation due to the customer if the auto-reversal does not happen within TAT.
Compensation is set at ₹100 per day of delay, credited automatically by the bank — the customer does not have to claim it.
TAT by payment system (selected)
| Scenario | Prescribed TAT |
|---|---|
| UPI — beneficiary account not credited despite payer's account being debited | T+1 |
| IMPS — same scenario | T+1 |
| NEFT — beneficiary account not credited within 2 hours | Reverse on T+1 |
| Card transaction at PoS / e-commerce — account debited but transaction not confirmed | T+5 |
| Card-not-present (online) declined but debited | T+5 |
| PPI / wallet — failed person-to-person transfer | T+1 |
| ATM — cash not dispensed but debited | T+5 |
See the full Annex of the TAT circular for every covered scenario.
What the TAT framework does NOT cover
The framework is for failed transactions. It does not govern:
- Refunds for goods you returned to a merchant in the normal course (commercial refunds).
- Disputes about quality, fitness for purpose or non-delivery of goods (these are consumer-law remedies).
- Merchant cancellations and order modifications.
- Card chargebacks initiated by the cardholder for billing disputes.
For commercial refunds, the binding rule is the merchant's published policy plus the settlement physics of your payment method. See our refund timeline explainer for the breakdown.
Adjacent RBI consumer rules
- Customer liability for unauthorised electronic transactions (2017): if you report an unauthorised debit within 3 working days, your liability is zero. 4–7 days: capped (₹5,000–₹25,000 depending on account type). Beyond 7 days: per bank's board-approved policy.
- RBI Integrated Ombudsman Scheme (2021): one ombudsman portal for banks, NBFCs and payment system operators. Mandatory 30-day wait after complaining to the bank, then file at cms.rbi.org.in.
- Master Direction on Card Issuance and Conduct: governs the credit / debit card lifecycle, including dispute resolution timelines for billing complaints.
Zlash One reconciles every refund against the rules above
Zlash One reads every order, return and refund mail in your inbox, matches refund credits to bank-credit notifications, and surfaces the cases where the TAT or merchant SLA was breached — so you know exactly when to escalate.
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Frequently asked
Do RBI rules force online merchants to refund within a fixed number of days?
No. The RBI's Turn-Around-Time (TAT) framework governs failed transactions across UPI, IMPS, NEFT, cards and prepaid instruments — not commercial refunds for returned goods. Commercial refund timelines are set by the merchant's own policy. The RBI rules are still important because the underlying settlement infrastructure that moves the refunded money is the same.
What is the RBI compensation amount for a delayed refund?
For failed transactions covered by the TAT framework, ₹100 per day of delay beyond the prescribed turn-around-time. This applies automatically — the bank credits the compensation along with the reversal. For commercial refunds (return-of-goods), there is no statutory ₹100/day equivalent; remedies sit under the Consumer Protection Act, 2019.
Where does the RBI ombudsman fit in?
The RBI ombudsman handles complaints against banks and payment system providers — for example, when an auto-reversal under the TAT framework did not happen, or an unauthorised debit was not reversed within the zero-liability window. Merchant disputes go to the National Consumer Helpline / consumer commission, not the RBI ombudsman.