As per the RBI Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems notification on September 20, 2019:
Fund Transfer via UPI: If a UPI payment is initiated and the amount is debited from the sender’s account but not credited to the beneficiary’s account, the beneficiary bank must process an auto-reversal by T+1 day. In case of a delay beyond T+1 day, a penalty of Rs100 per day will be applicable.
Merchant Payment via UPI: If a UPI payment is made to a merchant and the amount is debited from the sender’s account but the transaction confirmation is not received at the merchant’s location, an auto-reversal must be completed within T+5 days. If the delay extends beyond T+5 days, a penalty of Rs 100 per day will apply on the customer’s bank. (*T is transaction day)
