The Reserve Bank of India mandates that banks must refund failed UPI transactions within T+1 day for person-to-person transfers and T+5 days for merchant payments. If these deadlines are missed, the bank is required to pay a penalty of ₹100 per day. This compensation should be processed automatically, though users can escalate the issue through bank grievance channels or the RBI portal if the payment is delayed.
When a digital payment made through the Unified Payments Interface (UPI) fails but funds are deducted from your account, there are clear regulatory rules to protect your money. The Reserve Bank of India has established specific timelines for banks to reverse such failed transactions. If a bank fails to meet these deadlines, it is liable to pay a penalty of ₹100 per day for each day of delay.
For person-to-person (P2P) transfers, the originating bank is required to credit the failed amount back to the sender within one working day (T+1), where T is the date of the transaction. For payments made to merchants (P2M), the timeline for the refund is T+5 days. These regulations apply when the failure is caused by technical issues within the banking infrastructure rather than a user error.
The compensation is intended to be processed automatically by the financial institution. This means the penalty should appear in your bank statement alongside the original refunded amount. However, if the refund is not processed within the mandated time or the compensation is missing, you should proactively take steps to recover your funds.
The first step is to use the help or dispute resolution feature available within your UPI application, such as Google Pay, PhonePe, or Paytm. When raising a dispute, ensure you have the transaction ID and a screenshot of the debit notification ready for reference. If the bank’s internal support team does not provide a satisfactory resolution within a reasonable period, you can take the matter further.
Customers have the right to escalate unresolved grievances through the Reserve Bank of India’s official Complaint Management System (CMS) portal. When communicating with the bank or filing a complaint, it is important to keep a record of all interaction reference numbers and communication logs. This helps ensure that your claim is tracked and addressed correctly by the grievance redressal department.