Banks to Pay Penalties: ₹500 for Credit Card Delays, ₹5,000 for Loan-Related Issues – Understand RBI Rules

Under RBI regulations, customers may be entitled to compensation of ₹500 for delays in closing a credit card, ₹5,000 for delays in the return of property documents, and ₹100 for delays in rectifying credit reports, subject to eligibility criteria.

Customers often have to make multiple visits to the bank when tasks are not completed on time. Issues range from delays in closing credit cards to not receiving original property documents even after a loan has been fully repaid. In such cases, customers now have the option not only to lodge a complaint but also to claim compensation in accordance with the rules.

The Reserve Bank of India (RBI) has established timelines for various banking services. Failure to adhere to these rules may require the bank to make payments on a daily basis in certain situations.

1. ₹500 per day for delay in closing a credit card

If a customer has requested the closure of a credit card and cleared all outstanding dues, the bank is required to close the card within seven working days. Failure to do so may result in the bank having to pay compensation of ₹500 for each calendar day of delay, payable until the card is actually closed.

2. ₹5,000 per day for delay in returning property documents

Banks are required to return original property documents within 30 days of the full repayment of a home loan or other eligible personal loan. If the delay is attributable to the bank, the customer may receive compensation of ₹5,000 per day in accordance with RBI regulations. In the event that documents are lost or damaged, the bank is also required to assist in obtaining duplicate or certified copies and bear the associated costs.

3. ₹100 per day for delays in correcting credit report errors

If incorrect information is recorded in a credit report and a complaint regarding its rectification is not resolved within the stipulated timeframe, the customer may be eligible for compensation. Under applicable rules, ₹100 may be paid for every calendar day of delay beyond the prescribed 30-day limit.

4. Relief for failed digital transactions

If money is debited from an account despite a failed UPI, ATM, or card transaction, the bank is required to refund the amount within a specified period under relevant regulations. In certain cases of delay, there is a provision for compensation of ₹100 per day. Eligibility and timelines depend on the type of transaction.

5. Loss of items in bank lockers

Banks may be held liable if items kept in bank lockers are damaged or stolen under specific circumstances. As per applicable RBI guidelines, the bank's liability is capped at 100 times the annual locker rent.

What should you do to claim compensation?

Customers should preserve records such as the date of the complaint filed with the bank, emails, receipts, and other relevant documents. If the complaint remains unresolved, one can approach the bank's grievance redressal mechanism and, in eligible cases, the RBI's complaint portal. However, compensation is not granted in every instance; it depends on the relevant rules, timelines, and circumstances.