The Hindu : Front Page : Ghost debiting haunts several bank customers

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Wednesday, Jul 08, 2009
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Ghost debiting haunts several bank customers

Laiqh A. Khan

Money stuck: Ghost debiting is on the increase following the withdrawal of transaction fee levied on inter-bank ATM usage.

BANGALORE: When Ramesh went to the Automated Teller Machine (ATM) of a reputed bank situated in his neighbourhood to draw his salary, the transaction failed and he did not receive any cash. To his horror, however, he found the amount had been deducted from his account.

Ramesh is just one of the thousands of bank customers who have become victims of what has come to be known as “ghost debiting”. This is on the increase following the withdrawal on April 1 this year of the transaction fee levied on inter-bank ATM usage, allowing bank customers to use ATMs of banks other than their own.

Even as almost all the public sector as well as private banks have been flooded with complaints of wrongful account debits against failed transactions at ATMs, the unfortunate customers are forced to endure long waits stretching for more than month for reversal of the funds wrongly deducted from their account.

“As my bank’s ATM was located a distance, I decided to withdraw cash from another bank’s ATM situated in the neighbourhood. But I never anticipated such turn of events”, said Ramesh, who found Rs. 20,000 deducted from his account after he attempted to withdraw Rs. 10,000 twice. “I have lodged a complaint with my bank and have been promised reversal of the funds at the earliest. I do not have cash to either meet my household expenses and forced to default on my housing loan EMI,” he said.

Dilip, who was also a victim of such wrongful debit in a transaction carried out in the first week of June, said the funds debited from his account had not been reversed though a month had elapsed since he lodged a formal complaint in the regard.

The short-changed customers are cut up with the banks for not expediting the reversal of erroneously deducted funds despite an order issued by the Reserve Bank of India (RBI) that wrongful debits arising out of failed ATM transactions should be reverted within a maximum of 12 days.

Officials in the banking industry attribute the failed transactions to technological glitches, snap in connectivity, improper maintenance of ATMs, etc.

The delay in reversal of funds, however, arises due to the “inter-bank” nature of transaction. “If such faulty transaction had taken place in the ATM of our bank we could have reversed the funds quickly. But most of the complaints are inter-bank in nature and it takes time to confirm with the other bank about the failed transaction and reverse the funds,” an official said.

A senior official of a public sector bank told The Hindu that the number of failed transactions had increased several fold after bank customers began freely using the ATMs of other banks for withdrawing cash. “Earlier, the number of failed transactions used to be roughly around 5 per cent of all transactions. Now, the figure has mounted to about 25 per cent,” the official said.

Sources in the RBI said the banks, which did not abide by the circular on the 12-day deadline for reversing the wrongful debits, could face penalties under Payment and Settlement Systems Act 2007.

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