Customer Goes After Bank for Failed ATM Transaction
Under the 2011 directive issued by the Reserve Bank of India (RBI) regarding failed ATM transactions, whereby your money is debited although you did not receive the cash from the machine, the time limit for resolution of customer complaints by the issuing banks is seven working days from the date of receipt of the complaint. Failure to re-credit the customer’s account within seven days of receipt of the complaint entails payment of compensation to the customer at Rs100 per day by the bank.
 
However, the Trichur branch of Indian Overseas Bank (IOB) violated the RBI directive and harassed one Dr MK Dayanandan, by ignoring his complaint for days on end. It was only after he filed an application under the Right to Information (RTI) Act, a few weeks later, that the bank deposited the penalty amount, on the 55th day of his complaint. Even the actual amount that was wrongly debited was paid on the 10th day of the transaction, which makes the bank guilty of defying the RBI directives.
 
The manner in which Dr Dayanandan pursued the matter and exposed IOB’s high- handedness is admirable. It would remind the Moneylife readers of the late Sharad Phadke, who pioneered this fight in 2010 and inspired many citizens not to take this injustice lying down. (Read: Banks must pay Rs100 a day penalty for delay in reimbursement for failed ATM transactions).
 
Dr Dayanandan’s attempt to withdraw Rs861 from the ATM of Indian Overseas Bank on 21 January 2017 was unsuccessful, but the amount was debited from his account. As per rules, the customer can lodge a complaint within 30 days of the failed transaction. Dr Dayanandan did so the next day, on 22 January 2017.
 
As the amount was not credited to his account within seven working days, Dr Dayanandan sent a reminder to the bank on 31 January 2017, requesting it to credit the amount, along with compensation for the delay. As per RBI directive, “…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 transaction.” 
 
On 2 February 2017, IOB credited Rs861 in Dr Dayanandan’s bank account but did not pay the compensation of Rs100 per day. So, on 14 February 2017, Dr Dayandanan sent another reminder for compensation, but the bank did not reply. He sent copies of his complaint to IOB Regional Manager, Ernakulam, IOB Customer Service, Chennai, IOB Public Grievance, Chennai and IOB ATM Transactions, Chennai, IOB Visa, but got no reply.
 
On 11 March 2017, he filed an RTI application regarding the compensation but to date has not received a reply (see box below for his RTI application). Instead, on 18 March 2017, a compensation of Rs100 was credited to h account after the RBI’s Regional Director from Kerala intervened. Surprisingly, even the Banking Ombudsman (BO) had dismissed Dr Dayanandan’s complaint. 
 
In a letter dated 18 March 2017, the Regional Manager of the IOB explained the reason why the delay was for only one day. He stated, “The transaction date was 21 January 2017. Date of complaint was 23 January 2017. Hence compensation vide RBI circular DPSS PD 2632/02.10.002/2010-11 states that it has to be credited within seven working days from date of complaint i.e., 23 January 2017 as 26th, 28th and 29 January 2017 were bank holidays. The seventh working day falls on 1 February 2017. The amount was credited on 2 February 2017. Hence, the branch credited Rs100 on 18 March 2017 to your account, being the compensation for one day.”
 
Dr Dayanandan says, “I sent a complaint to Banking Ombudsman at Trivandrum with every document that is required by the BO. In a usual stereotype manner, the BO rejected my complaint stating that I have not made a complaint to the branch. Aggrieved by the casual reply, I complained about Ombudsman to Regional Director for Kerala and to the Department of Consumer Education and Protection Cell (CEPC) of RBI. This made the Ombudsman to forward my complaints to IOB Trichur branch (with copy to me) to take action. Since I have not heard from them, I filed an RTI application to IOB on 11 March 2017. The RTI is pending.’’
 
Dr Dayanandan has not yet given up. He has filed another RTI application seeking information on action taken on IOB’s errant officers who handled his case. Similarly, in a letter to the Regional Manager, IOB, he has demanded, “As an affected person, I request to reply with the names, designations, official addresses of the bank officials responsible for the delay, the valid reasons of the delay, action taken or being taken against those officials responsible for the delay.’’ 
 
Way to go!
 
 
Responsibilities of banks
 
  • As per RBI Directive RBI/2010/11/547 DPSS.PD.No.2632 /02.10.002/2010-2011, dated 27 May 2011, the time limit for resolution of customer complaints by the issuing banks is seven working days from the date of receipt of the customer's complaint. Accordingly, failure to re-credit the customer's account within seven working days of receipt of the complaint shall entail payment of compensation to the customer at Rs100 per day by the issuing bank.
  • As per (1) Code of Bank's Commitment to Customers January 2014 of BCSBI and (2) IOB Code of Bank's Commitment to Customers January 2014, the Code does not replace or supersede regulatory or supervisory instructions of RBI and they will comply with such instructions/ directions issued by RBI from time to time. (In the Introduction)
  • As per BCSBI, banks have been mandated to resolve customer complaints regarding failed ATM transactions by re-crediting the customer's account within seven working days from the date of complaint. Banks have to compensate the customer at of Rs100 per day for delays beyond seven working days. The compensation has to be credited to the account of the customer without any claim being made by him/ her.
  • Code 2.1.4.a.b. & 7.1.e: "If your complaint has been received in writing, we will endeavor to send you an acknowledgement/a response within a week. If your complaint is relayed over phone at our designated telephone helpdesk or customer service number, we shall provide you a complaint reference number and keep you informed of the progress within a reasonable period of time.
  • Code 8.17.4.1.r. We will reimburse amounts wrongly debited in failed ATM transactions within the prescribed time limit. For any delay beyond the prescribed time limit, we will pay compensation as prescribed, provided the claim is lodged with the ATM card-issuing bank within 30 days of the transaction
  • Code 11.e.i. We will accord due priority to Senior citizens and differently abled persons. We will endeavor to provide you personalized services for banking transactions and redressal of grievances.(above is BCSBI & as adopted by 2) IOB Code of Banks Commitments to its Customers)
 
 
 
Dayanandan sought the following information through RTI
 
  • Kindly provide the valid reasons that forced Trichur Br to refuse to acknowledge my mails, (i) dt 31 Jan 2017 and (ii) 14 Feb 2017.
  • Kindly state the valid reasons that forced Trichur Br to refuse to reply to para 3 of my mail of14 Feb 2017.
  • Kindly explain the valid reasons for non compliance of RBI directive RBI/2010/11/547 DPSS.PD.No.2632/02.10.002/2010-2011 dated May 27, 2011and Code of Bank's Commitment to Customers by Banking Codes and Standards Board of India as adopted by IOB clause 8.17.4.1.r. of Bank's Commitment to Customers IOB 2014 by IOB Trichur.
  • Kindly explain the valid reasons of refusal by IOB Trichur to compensate at Rs100 per day, along with re-credit of failed ATM transaction on 02 Feb 2017, as per RBI directive RBI/2010/ 11/547 DPSS.PD.No.2632/02.10.002/2010-2011 dated May 27, 2011 and Code of Bank's Commitment to Customers by Banking Codes and Standards Board of India adopted by IOB clause 8.17.4.1.r. of Bank's Commitment to Customers IOB 2014.
  • Kindly provide the names of the persons with their designations who were responsible to acknowledge/reply /compensate and refusal to comply with RBI directive in this case.
  • Based on the data and enclosures provided by me, how many days compensation at Rs100 per day should be credited to my SB by IOB Trichur as per RBI directive and Code of Bank's Commitment to Customers by Banking Codes and Standards Board of India (BCSBI) as adopted by IOB.
  • Kindly state the (i) No. of days and the amount of compensation entitled by me and the (ii) date when the compensation would be credited to my SB.
  • Whether the (i) mails dt 31 Jan 17 & 14 Feb 17 were forwarded to RO EKM & CO by IOB Trichur? (ii) Weather the refusal of compensation as instructed by RO Ernakulum or CO Chennai? (iii) Whether the refusal of the branch was with the knowledge of RO/CO and kindly provide the names of the official responsible.
  • Kindly explain (i) what priority was accorded and (ii) what personalized services of personal grievances were provided in this case as per clause 11.e.of Code of IOB's Commitment to Customers - January 2014.
  • The total number of ATM failed transaction reported as per the records of IOB Trichur.
  • The total number of customers claimed compensation in the year 2016 and January Februry2017 and the number of customers compensated for the failed ATM Tranxs.
  • The total amount paid to customers as compensation to the failed ATM Transaction in the year 2016 and January Februry2017.
  • The total No pending cases of compensation of failed ATM Transaction with IOB Trichur.
  • The total number of customers who were refused compensation including my case by IOB Trichur along with the grounds of refusal.
 
 
(Vinita Deshmukh is consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting, which she won twice in 1998 and 2005, and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book, “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte”, with Vinita Kamte, and is the author of “The Mighty Fall”.)
Comments
Merchant M S
7 years ago
Dr Dayanandan may be arrested for withdrawing Rs 861/= from ATM. No machine does dispense the amount. Onlu amount in multiple of 100 are dispensed.
Chitrsen Aujikar
Replied to Merchant M S comment 6 years ago
Is it a joke getting arrested for keying wrong amount at ATM. :-) .
There are may mistakes from Bank side, which are making people to go for pvt. bank

1. Why incorrect amount was allowed to key in.
2. Why that amount was debited from account.
3. Why there was need for complaint for such transaction.
4. Why amount was not reversed even after compliant.
5. Why there were no reply from Bank for letters
6. Are Bank not aware of RBI guidelines



B. Yerram Raju
7 years ago
Dr Dayanandan is not in order in withdrawing from ATM an odd amount of Rs.861 and on top of it asserting his right for the access to the money. ATM is structured to dish out only in denominations of Rs.1000, 500, 100 during the material period of transaction. Had he clicked for Rs.800 or 900 the amount may have been delivered. Wrong cause is pursued legally.
asokan s
7 years ago
I wonder how a learned doctor can withdraw an odd amount of Rs 861 from an ATM. This looks strange. If a learned doctor does not know about ATM and its capacity, how can an uneducated villager will handle his ATM card. These days due to less staff and work pressure the bankers are unable to perform their regular duties. They have so many govt schemes to be implemented and they depend upon machines, mails and phones. Our banks are becoming modern but we are still in India with powercut, link failure due to so many factors.
Sucheta Dalal
7 years ago
This is a superb action. However, Vinita and Shailesh Gandhi... I request you to guide Mr Dayanand and others on how to frame the RTI questions. He can only ask for information under the act. By asking for a 'valid explanation' and 'reasons' he may give them an escape route. Maybe, as Anil Galgali does, he can reword the RTI and send it again? What do you think?
SRINIVAS SHENOY
7 years ago
This is a correct stand adopted by Dr. Dayanandan. But one can imagine, the position of the common bank customers.
Simple Indian
7 years ago
Kudos to Dr. Dayanandan who persevered with his complaint with various quarters, despite being stone-walled by IOB. The way he was treated by IOB, and more surprisingly his complaint being disallowed by the Banking Ombudsman reflects the systemic flaws in our entire Banking system. While PSU Banks are notorious for poor service levels, their private sector counterparts aren't much better. Wish RBI would have a Customer-friendly Cell in each major city to address the grievances of Banks' customers.
lekshyva
7 years ago
I too had the same problem with IOB in Trichy, Tamilnadu. Luckily I got the amount credited in my account within 5 or 6 days. But people said that such complaints are waste, no one gets the money back normally. Even Bank employees have the same opinion.
Parimal Shah
7 years ago
More and more people must fight for such justice.
The system is now so designed by the politicians and the baus and the management that when something goes wrong they pass the buck and hide under silly cover of systemic failure, technical failure and so on.
These guys need to learn and we need to teach them a lesson.
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