Consumer Commission orders Punjab & Sindh Bank to pay 59,600 over failed ATM transaction

The Commission has also directed the bank to pay 29,600 as compensation for delayed reversal of the failed transaction, 10,000 for mental agony, harassment and inconvenience, and 10,000 towards litigation expenses. The amounts have to be paid within 45 days from receipt of the order, failing which the outstanding amount will carry interest at 9% per annum from the date of default till realisation.

The order was passed on August 27, 2026, by President Divya Jyoti Jaipuriar and Member Rashmi Bansal on a complaint filed by Jitender Singh, an account holder of Punjab & Sindh Bank.

According to the complaint, Singh attempted to withdraw 10,000 from an Axis Bank ATM on December 5, 2022. Although the transaction appeared successful and the amount was debited from his account, the ATM did not dispense any cash. He claimed that a colleague subsequently used the same ATM and successfully withdrew 20,000.

Singh approached Punjab & Sindh Bank on December 7, 2022, and subsequently submitted a written complaint on December 19, seeking restoration of the amount. The bank maintained that its records showed the transaction as successful. Singh again approached the bank in January 2023 and paid 590 towards further investigation, but the grievance remained unresolved.

The Commission noted that Punjab & Sindh Bank had registered the complaint and forwarded it to Axis Bank, which rejected it on the ground that the transaction was successful. The matter was again raised with Axis Bank after 590 was deposited for further investigation and was subsequently referred to the ATM Cell/Arbitration. It was again rejected on the same ground.

However, the Commission observed that the bank failed to produce evidence showing that the cash had actually been dispensed. It specifically noted the absence of an ATM journal, cash balancing report, electronic journal, CCTV footage, switch-level reconciliation report or other reliable technical record establishing that 10,000 had been dispensed to the complainant.

The Commission further held that merely showing the transaction as successful in the electronic system could not conclusively establish that cash had actually been dispensed. It said the relevant question in a failed ATM transaction was whether the money was actually delivered to the customer.

Referring to the Reserve Bank of Indias framework for failed ATM transactions, the Commission noted that where an account is debited, but cash is not dispensed, the transaction has to be reversed within a maximum period of T+5 calendar days. In case of delay beyond that period, compensation of 100 per day is payable to the account holder.

The Commission also rejected the banks contention that the transaction had taken place at an Axis Bank ATM. It held that the card-issuing/account-maintaining bank could not shift the burden of an inter-bank dispute onto the consumer. Any dispute between the issuing and acquiring banks had to be resolved through the applicable inter-bank mechanism.

While calculating the delayed compensation, the Commission held that the period of delay would be reckoned after the prescribed period following the complainants intimation to the bank. It calculated 296 days of delay up to the filing of the complaint on October 16, 2023, and awarded 29,600 at the prescribed rate of 100 per day.

The Commission declined the complainants claim of 1.5 lakh for alleged professional or pecuniary loss, observing that no cogent documentary evidence had been produced to establish such loss. It, however, awarded 10,000 for mental agony, harassment and inconvenience and another 10,000 as litigation costs.

The complaint was accordingly allowed against Punjab & Sindh Bank. The Commission clarified that any dispute between Punjab & Sindh Bank and Axis Bank regarding reconciliation or recovery of the disputed amount would have to be resolved between the banks and would not affect the complainants rights. (ANI)