Lok Sabha Question No. 1751 (UNSTARRED), answered on 2023-02-13
Subject: Failure of Online Transactions
Ministry: FINANCE
Asked by: Vijayakumar (alias) Vijay Vasanth

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO. 1751

ANSWERED ON MONDAY, FEBRUARY 13, 2023/MAGHA 24, 1944 (SAKA)

## Failure of Online Transactions

1751. SHRI VIJAYAKUMAR (ALIAS) VIJAY VASANTH:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government is aware that many online transactions fail for various reasons, if so, the details thereof;
- (b) whether the Government or the bankers have received the complaints in this regards, if so, the details thereof;
- (c) the steps taken by the Government about the failure of online payments;
- (d)whether  the  consumer  ask  for  the  compensation  if  the  institutions  do  not  settle  the  failed transactions within the timeline, if so, the details thereof; and
- (e) the details of the pending complaints during the last three years, institution-wise along with the action taken by the Government in this regard?

## Answer

THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (DR BHAGWAT KARAD)

- (a) Banks have informed that online transactions may fail due to various reasons, some of them, inter-alia are as under:
- Insufficient Funds.
- Invalid Credentials.
- Timeout issue in Core Banking Solution (CBS)/ National Payments. Corporation of India (NPCI) / at Beneficiary Bank.
- Expiry of Daily Limits.
- Network Issues.
- (b) to (d) Reserve Bank of India (RBI) has apprised that they are continuously monitoring the decline in online transactions of various payment systems for different reasons and necessary actions are taken for improvement in respective payment systems, which includes:
- i.  RBI vide its  circular  dated  September  20,  2019,  has  issued  instructions  for  time-bound resolution of failed transactions; failure to do so may lead to payment of compensation  to customers.
- ii.  RBI vide its  circular  dated  August 06,  2020  has  advised the authorised Payment System Operators and participants (banks and non-banks) to put in place system/s for Online Dispute Resolution for resolving disputes and grievances of customers, related to failed transactions.

Moreover, Ministry  of  Electronics  and  Information  Technology  (MeitY)  has  integrated  Digital Payment Grievances along with Ministry of Consumer Affairs (MoCA) for utilizing the National Consumer Helpline (NCH) platform of Department of Consumer Affairs (DoCA). All the major banks and financial service institutions have been on-boarded on NCH Platform which is live.

With regard to compensation to the customers for failed transactions, RBI has issued following instructions:

- i. If NEFT transaction is not credited or returned within two hours, then the beneficiary bank is liable to pay penal interest at the current RBI Liquid Adjusted Facility Repo Rate plus two percent for the period of delay.
- ii. If RTGS transaction is not credited to the beneficiary's account within 30 minutes of the receipt of the message at its Member Interface then the beneficiary's bank has to pay compensation at current repo rate plus 2% to the beneficiary customer for delay.
- iii. RBI has mandated customer compensation of ₹100/ - per day of delay beyond T + 5 days for failed transactions at ATMs.

(e) RBI has apprised that if customers are not satisfied by the response of the Regulated Entities, they can file a complaint before RBI under the Ombudsman Scheme. Accordingly, the number of complaints  received  by  RBI  with  respect  to  ' delay  or  failure  to  effect  online  payment  /  Fund Transfer ' is as under:

|                                      | No. of complaints related to failed online transactions   | No. of complaints related to failed online transactions   | No. of complaints related to failed online transactions   |
|--------------------------------------|-----------------------------------------------------------|-----------------------------------------------------------|-----------------------------------------------------------|
| Year                                 | Received                                                  | Disposed as on February 06, 2023                          | Pending as on February 06, 2023                           |
| 2019-20 (July to June)               | 21,532                                                    | 21,532                                                    | 0                                                         |
| 2020-21 (July to Mar)                | 19,312                                                    | 19,312                                                    | 0                                                         |
| 2021-22 (April to Mar)               | 15,436                                                    | 15,436                                                    | 0                                                         |
| 2022-23 (April to February 06, 2023) | 10,155                                                    | 9,164                                                     | 991                                                       |

Various Institutions have their internal mechanism to deal with the complaints received and their disposal, as per the guidelines issued by the regulator.

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