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Ombudsman for Digital Payment Transaction

 Go Digital we often hear this word although list out all its benefits not possible to explain due to my confined space availability in the blog. Let me explain to whom should we complain if when an electronic funds transfer failed to complete the transaction initiated by us normally we lodge a complaint to the bank, but the payment system not owned or controlled by the same bank, if its Amazon pays, Mobikwik Wallet.

In such scenario understanding the process flow of payment processing of the banks will help you to redress the digital payments issue without any hassle.

RBI has introduced the scheme under section 18 Payment and Settlement Systems Act, 2007, No cost mechanism to address the digital transaction complaint by the customers of the System Participants with an effect from January 31, 2019.

Who is this System Participants or Operators?
A Person or any other person participating in a payment system and includes the system provider;
who operates an authorised payment system.

Explanation.- For the purposes of this clause, "payment system" includes the systems enabling credit card operations, debit card operations, smart card operations, money transfer operations or similar operations;

To know the list of Payment System Operators’ authorised by the Reserve Bank of India to set up and operate in India under the Payment and Settlement Systems Act, 2007 is as under
https://rbi.org.in/scripts/publicationsview.aspx?id=12043

Appointment of Ombudsman.
Power of appointing ombudsman lies with the RBI

Number of Officials appointed till date and office address.
Please link the below to know the Address.
https://m.rbi.org.in/Scripts/FAQView.aspx?Id=127

Grounds of complaints to lodge with the ombudsman.

Prepaid Payment Instruments: Non-adherence to the instructions of Reserve Bank by System Participants about Prepaid Payment Instruments1 on any of the following:
a. Failure in crediting merchant's account within a reasonable time;

b. Failure to load funds within a reasonable time in wallets/cards;

c. Unauthorized electronic fund transfer;

d. Non-Transfer / Refusal to transfer/ failure to transfer within a reasonable time, the balance in the Prepaid Payment Instruments to the holder’s ‘own’ bank account or back to a source at the time of closure, expiry of validity period etc., of the Prepaid Payment Instrument;

e. Failure to refund within reasonable time/refusal to refund in case of unsuccessful / returned / rejected / cancelled / transactions;

f. Non-credit / delay in crediting the account of the Prepaid Payment Instrument holder as per the terms and conditions of the promotions offer(s) from time to time if any;

g. Non-adherence to any other instruction of the Reserve Bank on Prepaid Payment
Instruments.

Mobile / Electronic Fund Transfers: Non-adherence to the instructions of the Reserve Bank on Mobile / Electronic fund transfers by System Participants on any of the following:
a. Failure to effect online payment/fund transfer within a reasonable time;

b. Unauthorized electronic fund transfer;

c. Failure to act upon stop-payment instructions within the time frame and under the circumstances notified to the customers within a prescribed timeline;

d. Failure to reverse the amount debited from customer account in cases of failed payment transactions within a prescribed timeline;

e. Non-adherence to any other instruction of the Reserve Bank on Mobile/Electronic fund transfers.

Non-adherence to instructions of Reserve Bank / respective System Provider to System Participants, on payment transactions through Unified Payments Interface (UPI) / Bharat Bill Payment System (BBPS) / Bharat QR Code / UPI QR Code on the following grounds:
a. Failure in crediting funds to the beneficiaries’ account;

b. Failure to return within a reasonable time the payment to the originating member in case of failure to credit the funds to the beneficiary’s account;

c. Failure to / delay in refund of money back to the account in case of transaction failure or declined transactions (i.e. failed transactions);

d. Non-adherence to any other instruction of the Reserve Bank on payment transactions / through Unified Payments Interface (UPI) / Bharat Bill Payment System (BBPS)/ Bharat QR Code / UPI QR Code.


Non-reversal / failure to reverse within a reasonable time, funds wrongly transferred to the beneficiary account due to lapse at the end of System Participant.

Any other matter relating to the violation of the directives including on fees/charges, if any, issued by the Reserve Bank in relation to digital transactions.

NOTE: In respect of digital transactions done on third-party platforms, it will be the responsibility of the Payment Service Provider to resolve customer disputes arising out of such transactions.

Procedure for complaint.
The individual can file a complaint with the Ombudsman by writing on a plain paper and sending it to the concerned office of the Ombudsman by post/fax/hand delivery. One can also file it by email to the Ombudsman for Digital Transactions is available on RBI's website.

Territorial Jurisdiction
An individual may lodge a complaint with the Office of the Ombudsman for Digital Transactions within whose jurisdiction the branch or office of the System Participant complained against, is located. For complaint arising out of services with centralized operations, complaints can be filed with the office of the Ombudsman for Digital Transactions within whose territorial jurisdiction the billing / declared address of the customer is located.

Advocate cant appears on behalf of the complainant.

Fee
No. There is no charge or any fee for filing/resolving customers’ complaints.

The complaint will not be considered under the following circumstances:
a. If the System Participant against whom the complaint is registered is not covered under the Scheme.

b. If one has not approached the System Participant concerned in the first instance for redressal of the grievance.

c. If the subject matter of a complaint is not pertaining to the grounds of complaint specified under Clause 8 of the Scheme.

d. If one has not made the complaint within one year from the date of receipt of the reply from the System Participant; or if no reply is received, and the complaint to the Ombudsman is made after the lapse of more than one year and one month from the date of complaint to the System Participant. In exceptional circumstances as decided by the Ombudsman, a complaint made after the period mentioned above may be accepted by the Ombudsman, provided the complaint is made before the expiry of the period of limitation prescribed under the Indian Limitation Act, 1963 for such claims.

e. If the subject matter of the complaint is pending for disposal / has already been dealt with at any other a forum like the court of law, consumer court etc.

f. If the complaint is for the same the subject matter that was settled through the office of the Ombudsman in any previous proceedings.

g. If the complaint is frivolous or vexatious.

h. The complaint falls under the disputes covered under Section 24 of the Payment and Settlement Systems Act, 2007.

i. The complaint pertains to the dispute arising from a transaction between customers.

OFFENCES AND PENALTIES
26. (1) Where a person contravenes the provisions of Penalties section 4 or fail to comply with the terms and conditions subject to which the authorisation has been issued under section 7, he shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to ten years or with fine which may extend to one crore rupees or with both and with a further fine which may extend to one lakh rupees for every day, after the first during which the contravention or failure to comply continues.

(2) Whoever in any application for authorisation or in any return or other document or on any information required to be furnished by or under, or for the purpose of, any provision of this Act wilfully makes the statement which is false in any material particular, knowing it to be false or wilfully omits to make a material statement, shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine which shall not be less than ten lakh rupees and which may extend to fifty Lakh rupees.

(3) If any person fails to produce any statement, information, returns or other documents, or to furnish any statement, information, returns or other documents, which under section 12 or under section 13, it is his duty to furnish or to answer any question relating to the operation of a payment system which is required by an officer making an inspection under section 14, he shall be punishable with fine which may extend to ten Lakh rupees in respect of each offence and if he persists in such refusal, to a further fine which may extend to twenty-five thousand rupees for every day for which the offence continues.

(4) If any a person discloses any information, the disclosure of which is prohibited under section 22, he shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five lakh rupees or an amount equal to twice the amount of the damages incurred by the act of such disclosure, whichever is higher or with both.

(5) Where a direction issued under this Act has not complied with within the period stipulated by the Reserve Bank or where no such the period is stipulated, within a reasonable time or where the penalty imposed by the Reserve Bank under section 30 is not paid within a period of thirty days from the date of the order, the system provider or the system participant which has failed to comply with the direction or to pay the penalty shall be punishable with imprisonment for a term which shall not be less than one month but which Offences by companies Cognizance of offences may extend to ten years, or with fine which may extend to one crore rupees or with both and where the failure to comply with the direction continues, with a further fine which may extend to one lakh rupees for every day, after the first during which the contravention continues.

(6) If any provision of this Act is contravened, or if any default is made in complying with any other requirement of this Act, or of any regulation, order or direction made or given or condition imposed thereunder and in respect of which no penalty has been specified, then, the person guilty of such contravention or default, as the case may be, shall be punishable with fine which may extend to ten lakh rupees and where a contravention or default is a continuing one, with a further fine which may extend to twenty-five thousand rupees for every day, after the first during which the contravention or default continues.

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