Failed NEFT or RTGS: the Rs 100 a day rule does not apply to you

The rule people are thinking of is real, and it is worth knowing. It is RBI circular RBI/2019-20/67, dated 20 September 2019, titled Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems. It sets a flat compensation of Rs 100 per day of delay.

It applies to exactly eight payment systems, listed in its annexure:

1. Automated Teller Machines, including Micro-ATMs
2. Card transactions
3. Immediate Payment System (IMPS)
4. Unified Payments Interface (UPI)
5. Aadhaar Enabled Payment System (AePS)
6. Aadhaar Payment Bridge System (APBS)
7. National Automated Clearing House (NACH)
8. Prepaid Payment Instruments — wallets and cards

NEFT is not on that list. Neither is RTGS. We checked the full text of the circular on rbi.org.in: the strings "NEFT", "RTGS", "National Electronic Funds Transfer" and "Real Time Gross Settlement" appear zero times in it, while all eight systems above appear by name.

So if your salary transfer or your RTGS property payment is stuck, quoting this circular at your bank will not help you. Something else will.

Two corrections before the real rules

The Rs 100 clock does not start when the transaction fails

Even for the eight systems it does cover, the compensation does not accrue from the moment something goes wrong. It begins only after the system's own auto-reversal deadline has passed. The annexure sets that deadline per system — T+1 day for some, T+5 days for others — and the compensation language is consistently "per day of delay beyond" that point. The ATM row, for example, reads:

₹ 100/- per day of delay beyond T + 5 days, to the credit of the account holder.

RBI/2019-20/67, Annex, row 1(a)

A UPI payment that auto-reverses inside the deadline earns nothing, and that is the intended outcome, not a bank being difficult.

What actually governs NEFT

The credit should arrive within two hours of batch settlement

How much time should I expect for receipt of funds by beneficiary? Ans: A timeline of two hours from the batch settlement can be expected, within which beneficiary's account should be credited.

RBI, NEFT FAQ, Question 18

If it cannot be credited, it must come back within two hours

This is the answer to "my NEFT failed, when do I get my money back", and it is a great deal faster than the T+1 day people expect:

If it is not possible to afford credit to the account of the beneficiary for any reason, destination banks are required to return the transaction (to the originating branch) within two hours of completion of the batch in which the transaction was processed.

RBI, NEFT FAQ, Question 19

Two hours from batch completion. Not two hours from when you noticed.

Late credit or late return earns penal interest, not a flat fee

Where the TAT circular gives a fixed rupee amount, NEFT gives an interest rate. The rule predates the 2019 circular by nine years: RBI/2010-11/188, Uniformity in penal interest payable by banks for delays in credit / return of NEFT / NECS / ECS transactions, dated 1 September 2010. The rate is the RBI's current LAF Repo Rate plus two percent, for the period of the delay.

Two details that matter in practice:

• It is payable without you having to ask. The RBI's wording, in NEFT FAQ question 20, is that it is credited "without waiting for a specific claim to be lodged by the customer".
• The repo rate moves. We are deliberately not printing a percentage here, because any number we publish today will be wrong at some point and you would have no way to tell. Check the current repo rate on the day you need it and add two.

What actually governs RTGS

RTGS is tighter still, and it has two separate rules that are routinely run together.

• Delayed credit. The beneficiary bank is to credit the account within 30 minutes of receiving the payment message.
• Failed credit. If the account cannot be credited — it does not exist, it is frozen — the funds must be returned to the originating bank within one hour of receipt of the payment, or before the end of the RTGS business day, whichever is earlier.

Both are stated by the RBI in its RTGS FAQ. One hour, not one day.

The one thing none of these rules will fix

Every rule above concerns a payment that could not be completed. None of them help if the payment completed perfectly into the wrong account, because you typed the wrong account number.

The RBI is unambiguous that this is how the system works:

The credit is given to the account number written / given by remitter in his / her application / instruction. Credit to beneficiary account is released solely based on account number. It is the responsibility of remitting customer to write correct account number.

RBI, NEFT FAQ, Question 21

A wrong-but-valid account number produces a successful transaction. There is no failure for the two-hour return rule to attach to. Recovering the money then depends on the goodwill of whoever received it, with your bank acting as intermediary — which is a very different situation, and a much worse one, than a failed transfer.

The same is true of the IFSC. It routes the instruction to a branch; it does not select the account. Getting it wrong will usually cause a rejection, which is the good outcome. Getting the account number wrong will not.

If you need to escalate

1. Your own bank first. Its grievance redressal cell is the required first step and there is no way around it.
2. Then the Ombudsman. The RBI's guidance is that if the grievance is not resolved within 30 days you may complain under the Reserve Bank – Integrated Ombudsman Scheme, 2021. The Scheme also lets you go there once the bank has rejected the complaint and you are not satisfied with its reply.
3. Quote the right rule. For a NEFT that did not arrive: the two-hour return timeline and the penal interest circular of 2010. For RTGS: the 30-minute credit and one-hour return obligations the RBI sets out in its RTGS FAQ. For a UPI, IMPS, card or ATM failure: the 2019 TAT circular and its Rs 100 per day, counted from the auto-reversal deadline.