ATM Cash Not Dispensed but Account Debited? RBI’s T+5 Refund Rule and ₹100-a-Day Compensation

Priya, a teacher in Pune, tries to withdraw ₹10,000 from another bank’s ATM on 16 October. The machine whirs, no cash comes out, and an SMS says ₹10,000 has been debited. If this has happened to you, RBI rules are on your side: when an ATM shows cash not dispensed but your account is debited, your bank has to reverse the money within five days of the transaction, and pay you ₹100 for every day of delay after that, without you even asking.

ATM cash not dispensed: the RBI rule

RBI’s circular on harmonised turnaround time (TAT) for failed transactions, dated 20 September 2019 and in force from 15 October 2019, covers ATMs and micro-ATMs. Its first row is exactly this case.

Source: RBI circular DPSS.CO.PD No.629/02.01.014/2019-20. “T” is the calendar date of the transaction, not a working day. The TAT is the outer limit; RBI asks banks to resolve failed transactions faster where they can.

Two parts of the circular matter most. First, the reversal must be “pro-active”: you should not need to file a claim. Second, compensation must be credited “suo moto, without waiting for a complaint or claim from the customer.”

Working out the deadline and the penalty

Take Priya’s cash not dispensed case. The transaction date is 16 October 2026.

1. T + 5 = 21 October. The ₹10,000 should be back in her account by then.
2. Suppose the bank reverses it only on 26 October. That is five days beyond the deadline.
3. Compensation: 5 × ₹100 = ₹500, payable to her account.

Our calculation, following the circular. The weekend and holidays, such as Dussehra on 20 October, do not stretch the deadline, because T counts calendar days. The compensation is the same whether ₹500 or ₹50,000 was stuck.

Does it count as one of your free ATM withdrawals?

No. A cash not dispensed attempt should not use up a free withdrawal. A separate RBI circular dated 14 August 2019 says transactions that fail because of technical reasons or “non-availability of currency notes in the ATM” shall not be counted as valid ATM transactions, and “no charges therefor shall be levied.” If your bank charged you for the failed attempt or reduced your free withdrawals, ask for a reversal. Our SBI ATM charges post shows how free limits and fees work at one large bank.

What to do in a cash not dispensed case

• Stay at the machine for a minute. Sometimes cash is delayed or the transaction reverses at once. Don’t let anyone “help” you with your card.
• Keep the proof. Note the ATM ID, location, date, time and amount. Keep the slip if one printed, and save the debit SMS.
• Contact your own bank, the one that issued your card, even if you used another bank’s ATM. Call customer care or raise a complaint through the app or branch. Note the complaint number.
• Don’t retry the same amount again and again on a machine that just failed. Each attempt can create another debit to chase.
• Watch your statement. Look for the reversal by T + 5 and, if it comes late, the ₹100-a-day credit.

The bank may check the ATM’s electronic journal and cash count before reversing. This is why the time and ATM ID you noted matter.

If the bank doesn’t pay: escalate

Source: RBI’s FAQs on the Reserve Bank – Integrated Ombudsman Scheme, 2026. Filing is free. The ombudsman can award compensation of up to ₹30 lakh for consequential loss and up to ₹3 lakh for loss of time, expenses and harassment. The toll-free helpline 14448 gives information and complaint status. Our guide to RBI ombudsman complaints walks through the form.

What the rule does not cover

• Fraud or skimming: If cash was withdrawn without your knowledge, that is an unauthorised transaction, covered by different rules on customer liability. See our zero-liability explainer and report it at once.
• Partial cash: If the machine gave you less than the amount debited, report it the same way. The TAT circular’s wording is “cash not dispensed”; it does not separately mention short payment, so state the exact shortfall in your complaint and ask the bank to treat it as a failed transaction.
• Cross-border use: The framework covers domestic transactions only.

UPI and ATM failures: same idea, different clocks

A failed UPI transfer has a shorter deadline, T + 1 day, because the money only needs to bounce back between banks. ATM cases get T + 5 because the bank may need to reconcile the cash in the machine. Our failed UPI refund guide covers the UPI side in detail.

FAQs

How long does a refund take for cash not dispensed at an ATM?

The bank must reverse it within T + 5 calendar days, where T is the transaction date.

How much compensation do I get for a late refund?

₹100 for each day after T + 5, credited to your account automatically.

I used another bank’s ATM. Whom do I complain to?

Your own bank, the one that issued your debit card.

Will the failed attempt be counted in my free ATM transactions?

It should not. RBI’s 2019 clarification says such failures are not valid ATM transactions and cannot be charged.

What if the bank says the ATM dispensed cash?

Ask for the ATM’s journal and CCTV review, keep your complaint number, and escalate to the RBI Ombudsman if you disagree with the reply.

Takeaway: In a cash not dispensed case where your account is debited, the bank must return the money within T + 5 days and pay ₹100 a day for any delay, on its own. Note the ATM ID and time, complain to your card-issuing bank, and use the RBI Ombudsman if it fails.