Approved by CSCM: May 17, 2023

Last Reviewed Date: May 19, 2023

Customer Compensation Policy

Introduction

The Compensation Policy (the Policy) of the Bank is a reflection of the Bank’s on-going
efforts to provide better service to our customers and set higher standards for
performance. The Policy is based on principles of transparency and fairness in the
treatment of customers.

The objective of the Policy is to establish a system where the Bank compensates the
customer for any financial loss the customer might have incurred due to deficiency in
service on the part of the Bank or any act of omission or commission directly attributable
to the Bank.

This policy document covers the following aspects:

1. Timelines for payment of compensation amount
2. Erroneous/Unauthorised debiting of accounts or unauthorised transactions reported
by customers
3. NACH direct debits/other debits instruction to accounts
4. Credit Cards issued without customer’s consent
5. Compensation payable on account of delays in collection of Foreign currency
cheques, bills or payment of interest of delayed credit
6. Compensation payable on interest for delayed collection of cheques or payment of
cheques after stop payment instructions
7. Cheque/loss of instrument in Transit/in clearing process or at paying bank’s branch
8. Payment of interest for delay in issue of duplicate draft
9. Reversal of Erroneous/unauthorized/fraudulent or other transactions
10. Violation of the code of Bank’s commitment to the customers by Bank’s staff
11. Delay in release of Securities/Documents/Title deeds
12. Delay in credits and/or return of transactions
13. Mis-selling of third party products
14. Compensation Framework for Failed Transactions using Authorised Payment
Systems
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15. Compensation for events like fire, theft, burglary, dacoity, robbery, building collapse
or in case of fraud committed by the employees of the bank towards Safe Deposit
Lockers
16. Force Majeure

The commitments under this policy are without prejudice to any right the Bank will have in
defending its position before any forum duly constituted to adjudicate banker-customer
disputes.

The compensation amount would be approved as per the Board approved Policy on
Delegation of Financial Power.

1. Timelines for payment of compensation amount

In case the Bank is liable to pay any compensation in accordance with the Policy, the
same would be paid to the complainant within 7 working days from the completion of
the investigation.

2. Erroneous/Unauthorised debiting of accounts or unauthorised transactions

reported by customers

a) Debit by the Bank

If the Bank has raised an erroneous/unauthorised direct debit to an account, upon

being informed of the erroneous/unauthorised debit, the entry will be reversed, after
due verification. In the event, the unauthorized/erroneous debit has resulted in a
financial loss for the customer by way of reduction in the minimum balance
applicable for payment of interest on savings bank deposit or payment of additional
interest to the Bank in a loan account, charges levied for balance falling below
minimum balance requirement, the Bank will compensate the customer for such
loss. Further, if the customer has suffered any financial loss incidental to return of a
cheque or failure of direct debit instructions due to insufficiency of balance on
account of the unauthorized/erroneous debit, the bank will compensate the
customer to the extent of the financial loss after taking into consideration all
relevant factors.

Erroneous/unauthorised transaction reported by customers in respect of credit card

operations, which require reference to a merchant establishment, will be handled as
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per rules laid down by card association. Currently the chargeback investigation on
account of chargeback disputes range between 45 to 90 days.

In case verification of the entry reported to be erroneous/unauthorised by the

customer does not involve a third party, the Bank will endeavour to complete the
process of verification within a maximum period 7 working days from the date of
reporting of erroneous/unauthorised debit. In case, the verification involves a third
party or verifications are to be done at overseas centres, the Bank shall complete
the verification process within a maximum period of one month from the date of
reporting of erroneous/unauthorised transaction by the customer.

The Bank reserves its right to debit the account for reversing the amounts in case a
wrong credit is posted to a customer’s account without payment of any
compensation.

Further, this provision, would not apply to recovery of legitimate bank charges by
debit to the account, which is as per terms and conditions accepted by the customer
and executed only after the laid down process has been followed by the Bank.

b. Reported by Customers

The Bank has formulated a Board approved Customer Relations Policy for
unauthorised electronic Banking transactions reported by customers. The policy
covers in detail, the liability of a customer in different scenarios.

The compensation to the customer in the matter related to unauthorized electronic

banking transactions will be guided by the aspects of Customer Relation Policy.
For more details, please refer to Customer Relation Policy:
link: [Link]

1. NACH direct debits/other debits instruction to accounts

The Bank undertakes to carry out direct debit instructions of customers in time. In the
event the Bank fails to meet such commitments, the customer will be compensated to
the extent of direct financial loss or payment of additional interest to the Bank in a loan
account or any charges levied for reason of balance falling below the minimum balance
requirement or any charges levied for return of cheques due to shortfall in balance.
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Electronic payments such as RTGS//NEFT/IMPS instructions will be governed by the

applicable terms and conditions communicated to the customer.

The Bank would debit the customer’s account with applicable service charge as per the
tariff schedule/schedule of charges notified by the Bank.

In the event the Bank levies any charge that is not as per such tariff schedule/schedule
of charges, upon being informed of the erroneous charge by the customer, the Bank will
reverse the charges subject to scrutiny of agreed terms and conditions. In such cases,
the Bank shall compensate the customer for any direct financial loss by way of loss of
savings account interest on account of reduction in the daily closing balance applicable
for payment of interest on savings bank deposit or payment of additional interest to the
Bank in a loan account or any charges levied for balance falling below minimum
balance requirement or any charges levied for return of cheques due to shortfall in
balance.

4. Credit Cards issued without customer’s consent

Where it is established that the Bank had issued a credit card without written consent
of the recipient, the Bank would not only reverse the charges immediately but also pay
compensation without demur to the recipient amounting to twice the value of charges
reversed as per regulatory guidelines. Charges will include only those charges that are
levied to customer even when no transactions have been done on the card and such
charges have been actually recovered from the customer.
Transactions reported as erroneous by customers in respect of credit card operations,
which require specific reference to a merchant establishment will be handled as per
Chargeback rules laid down by VISA/MasterCard International. The Bank will provide
explanation and, if necessary, documentary evidence to the customer within a
maximum period of 90 days.

5. Compensation payable on account of delays in collection of Foreign currency

cheques, bills or payment of interest of delayed credit

a) Collection of Foreign Currency Cheque:

The Bank would not compensate the customer for delays in collection of cheques
designated in foreign currencies sent to foreign countries, as the Bank would not be
able to ensure timely credit from overseas banks. It is the Bank’s experience that
time for collection of instruments drawn on banks in foreign countries differ from
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country to country and even within a country, from place to place. The time norms
for return of instruments cleared provisionally also vary from country to country.
However, the Bank will compensate the customer for undue delays in affording
credit once proceeds are credited to the Nostro Account of the Bank with its
correspondent. The Bank however, may consider upfront credit against such
instrument by purchasing the cheque/instrument, provided the conduct of the
account has been satisfactory in the past.
The compensation in such cases will be worked out as follows:
i. Interest for the delay in crediting proceeds as indicated in the Cheque
Collection Policy of the Bank.
ii. Compensation for any possible loss on account of adverse movement in
foreign exchange buying rate of the Bank as applicable for the transaction.

b) Payment of Interest for delayed credits (Foreign Inward Remittances other

than Foreign Currency Cheques):

Compensation will be paid as per Foreign Exchange Dealers Association of India

(FEDAI) Rules 8th edition. As per rule 4.5, in case foreign inward remittance, Bank
shall make payment or send intimation, as the case may be, to the beneficiary in
two working days from the date of receipt of credit advice/nostro statement. In case
of delay, the bank shall pay the beneficiary interest @ 2% above the savings
account interest rate. The bank shall also pay compensation for adverse movement
of exchange rate, if any, as per its compensation policy.

c) The compensation payable on account of delays in collection of Foreign Bills

would be as per the FEDAI Rule 2.5 (c).

6. Compensation payable on interest for delayed collection of cheques or payment of

cheques after stop payment instructions

a) Local Cheques: Compensation at savings bank interest rate shall be paid for the
corresponding period of delay.

b) Outstation Cheques: As part of the Policy, the Bank will pay interest to its customer
on the amount of collection instruments in case there is delay in giving credit beyond
the time period specified in banks Cheque Collection Policy.
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Interest for delayed collection shall be paid at the following rates:

Serial Scenario Applicable Interest Rate

No.
Cheque Deposited in Operative Account
1 Drawn on State Capitals, For a period of delay up to 14 days, Savings
Major Cities, and any Bank rate of interest and for delay beyond 14
other location days, applicable term deposit rate of interest
will be paid.
Delay beyond 90 days - interest will be paid
at the rate of 2% above the corresponding
Term Deposit rate (applicable for period of
delay. FD interest would be compensated
from 1st day of delay)

Serial Scenario Applicable Interest Rate

No.
Cheque Deposited in Loan Account
1 Any delay beyond regular Where the delay is beyond the regular
collection collection period (up to 90 days) interest will
be paid at the rate applicable to the loan
account for the respective period.
Delay beyond 90 days – interest will be paid
at the rate of 2% above the rate applicable to
the loan account (Interest would be
compensated from 1st day of delay).

Period of delay, for the purpose of payment of interest, will be calculated as the gap
between the defined date of credit of cheque and the actual date of credit. Such
interest shall be paid without any demand from customers in all types of accounts
The defined date of credit is typically defined at the time of collection of cheque for
each channel. There shall be no distinction between instruments drawn on the
bank’s own branches or on other banks for the purpose of payment of interest on
delayed collection. It may be noted that the interest payment would be applicable
only for instruments (drawn in INR) sent for collection within India where ICICI Bank
has a branch or cheque is collected by correspondent bank. In case of any claims
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raised by the customer on account of delayed interest payments the bank would
settle the claim within 90 days of receipt.

c) Cash Management Services: For customers availing Cash Management Services

(CMS), collection of instruments is carried out as per the terms of the bilateral
agreement between the bank and customers. Penalties, if any, will be payable as
per the terms of the bilateral agreement.

d) Payment of Cheques after Stop Payment Instructions: In case a cheque has

been paid after stop payment instruction is acknowledged by the Bank, the Bank
shall reverse the transaction and give value-dated credit to protect the interest of
the customer. Such debits will be reversed within 2 working days of the customer
intimating the transaction to the Bank. In such cases, the Bank shall compensate
the customer to the extent of direct financial loss, if any, by way of loss of savings
account interest on account of reduction in the daily closing balance applicable for
payment of interest on savings bank deposit or payment of additional interest to in
a loan account or any charges levied for reason of balance falling below minimum
balance requirement or any charges levied for return of cheques due to shortfall in
balance.

7. Cheque/loss of instrument in Transit/in clearing process or at paying bank’s

branch

The Bank’s Customer Compensation Policy for financial loss suffered by the customers
due to loss of instrument after it has been handed over to the Bank for collection by the
customer would also be as indicated in Cheque Collection Policy. For more details
please refer to cheque collection policy: link: [Link]
[Link]?

In the event a cheque or an instrument accepted for collection is lost in transit in the
clearing process or at the paying bank’s branch, the Bank shall immediately on coming
to know of the loss, bring the same to the notice of the account holder so that the
account holder can inform the drawer to record stop payment and also take care that
cheques, if any, issued by him/her are not dishonoured due to non-credit of the amount
of the lost cheques/instruments. The Bank would provide all assistance to the customer
to obtain a duplicate instrument from the drawer of the cheque. This will be applicable
only to instruments drawn in INR payable within India.
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If the Bank loses the cheque, the Bank will bear the stop payment charges on customer
producing relevant document. The compensation in such cases would be as follows:

 In case intimation regarding loss of instrument is conveyed to the customer beyond

the time limit stipulated for collection (7/10/14 days as the case may be) interest will
be paid for the period exceeding the stipulated collection period at the rates
specified in the outstation cheque table of Cheque Clearing process mentioned
above in clause 6.
 In addition, bank will pay interest on the amount of the cheque for a further period
of 15 days at Savings Bank rate to provide for likely further delay in obtaining
duplicate cheque/instrument and collection thereof.
 The Bank would also compensate for any reasonable charges, the customer incurs
in getting duplicate cheque/instrument upon production of receipt, in the event the
instrument is to be obtained from a bank/institution that would charge a fee for
issue of duplicate instrument.

8. Payment of interest for delay in issue of duplicate draft

Duplicate draft will be issued to the purchaser on the basis of adequate indemnity. The
Bank will issue duplicate draft (drawn on the Bank) to the customer within a fortnight
from the receipt of such request. For delay beyond this stipulated period, the Bank will
compensate customer at the rate of fixed deposit, applicable on the due date of expiry
of the stipulated period. Such compensation shall be paid at the rate applicable for fixed
deposits for the number of days over and above the stipulated period. This would be
applicable only in cases where the request for duplicate draft drawn on the Bank is
made by the purchaser and would not be applicable in the case of third party
endorsements.

9. Reversal of Erroneous/unauthorized/fraudulent or other transactions

a) Digital Transaction - Internet and Mobile Banking (Vishing/Smishing/Phishing,

etc.) transactions

Fraudulent debits arising out of Internet banking and Mobile banking are mainly
categorised such as
 Funds Transfer to another account (within the Bank and outside the Bank)
 Internet /MOTO using Credit /Debit card
 Skimming/Counterfeit of Credit/Debit Card
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 Hacking of internet ID/password

 Pre-paid mobile recharge transaction using Credit/Debit card.
 Transactions in shopping malls using Credit/Debit Card.

In case of any fraud, if Bank is convinced that an irregularity/fraud has been

committed by its staff towards any constituent, the Bank will at once acknowledge
its liability and pay just claim. In cases where the Bank is at fault, Bank will
compensate the customer without demur.

For cases where the Bank is not at fault, but the customer has either acted
fraudulently or inadvertently compromised his Internet Banking security details
(example: ID, passwords, date of birth, mother’s maiden name etc.) or acted without
reasonable care (which includes not taking steps to protect computers from hackers).
Banks are not responsible for losses caused by a third party when customers have
acted without reasonable care.

However, in exceptional circumstances Bank may compensate the customer for cases
where the customer has not compromised any personal and confidential security
parameters required to complete an Internet banking/iMobile transaction and based
on deliberation of various facts such as:

 Justification given by the customer

 Immediate or delay in reporting by the customer based on SMS alert, account
statement, mini statement, etc. received by the customer

b) Non Digital transaction

Bank needs to take into account the following, while deciding on customer
compensation:

(i) In case of any fraud, if Bank is convinced that an irregularity/fraud has been
committed by its staff towards any constituent, Bank should at once
acknowledge its liability and pay just the claim.
(ii) In cases where neither the branch nor the customer is at fault, but the fault lies
elsewhere in the system, Bank should compensate the customer as per the
policy.
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The following is laid down for all the fraud cases other than those pertaining to
Internet Banking Frauds. Typically, these frauds are of the following types:
 Lottery
 Job Rackets
 Transfer of Funds towards emails received

a) In case of any fraud, if Bank is convinced that an irregularity/fraud has been

committed by its staff towards any constituent, the Bank will at once
acknowledge its liability and pay just claim.
b) In cases where the Bank is at fault, Bank will compensate the customer without
demur.
c) In cases where neither the Bank nor the customer is at fault, but the fault lies
elsewhere in the system, the Bank will compensate the customer up to a limit of
5,000. Such compensation would be paid only once in the lifetime of an account.

10. Violation of the code of Bank’s commitment to the customers by Bank’s staff

In the event of receipt of any complaint from the customer that the Bank’s
representative/courier or DSA/collection agency has engaged in any improper conduct
or acted in violation of the Code of Bank’s Commitment to Customers which the Bank
has adopted voluntarily, the Bank is committed to investigate the matter and
endeavour to communicate the findings to the customer within 7 working days from
the date of receipt of complaint and wherever justified, compensate the customer for
financial loss, if any.

11. Delay in release of Securities/Documents/Title deeds

The original security documents of title should be returned to the borrower within 15
working days of repayment of all dues by the borrower, including principal amount,
interest, EMI, costs, service charges and all other amounts due. This is subject to there
being no outstanding under any other loan/overdraft/other financial facility availed by
the borrower from the Bank. In case of delay on the part of the Bank in returning such
documents, the Bank will compensate the customer at the rate of ` 100/- per week,
subject to a maximum payment of ` 500/-. However, in case of Force Majeure events,
the Bank at its own cost would endeavour to retrieve/recreate the title documents and
no compensation would be paid in such cases.
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12. Delay in credits and/or return of transactions

In the event of any delayed credit to beneficiaries' account, the destination bank would
be held liable to pay compensation.

NEFT: In the event of any delay or loss on account of error, negligence or fraud on the
part of an employee of the destination bank in the completion of funds transfer
pursuant to receipt of payment instruction by the destination bank leading to delayed
payment to the beneficiary, the destination bank shall pay compensation at current RBI
LAF repo rate plus 2 per cent for the period of delay. In the event of delay in return of
the funds transfer instruction for any reason whatsoever; the destination bank shall
refund the amount together with interest at the current RBI LAF repo rate plus two per
cent till the date of refund.

13. Mis-selling of third party products

In the event of Bank receiving of any complaint from the customer regarding mis-selling
of the third party products by the Bank, or about having engaged in any improper
conduct or about having acted in violation of any Code adopted by the Bank, the Bank
shall take appropriate steps to investigate and to handle the complaint. In case lapses
by the Bank employees are established, the Bank will compensate the customer
suitably, based on the facts and circumstances of the case.

14. Compensation Framework for Failed Transactions using Authorised Payment

Systems

The aspects of the compensation framework are outlined below:

a) Turn Around Time(TAT)
 The prescribed TAT is the outer limit for resolution of failed transactions
 Key Principles
 If the transaction is a ‘credit-push’ funds transfer and the beneficiary
account is not credited while the debit to originator has been effected, then
credit is to be effected within the prescribed time period failing which
penalty is payable to the beneficiary.
 If there is delay in initiation of a transaction at the originator bank’s end
beyond the TAT, then penalty is payable to the originator.
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 T is the day of transaction and refers to the calendar date.

 R is the day on which the reversal is concluded and the funds are received by
the issuer / originator. Reversal should be effected at the issuer / originator
end on the same day when the funds are received from the beneficiary end.
b) Failed Transactions
 A ‘failed transaction’ is a transaction which has not been fully completed due
to any reason not attributable to the customer such as failure in
communication links, non-availability of cash in an ATM, time-out of sessions,
etc.
 Failed transactions shall also include the credits which could not be effected to
the beneficiary account on account of lack of full information or lack of proper
information and delay in initiating a reversal transaction.
c) Description of the incidents, timeline for auto-reversal and compensation
payable is as mentioned below:

Sr. Framework for auto-reversal and

Description of the incident
No. compensation
Timeline for auto- Compensation
reversal payable

I II III IV
1 Automated Teller Machines (ATMs) including Micro-ATMs
₹100/- per day of
Pro-active reversal (R) of
Customer’s account debited delay beyond T+5
a failed transaction within
but cash not dispensed. days, to the credit of
a maximum of T+5 days.
the account holder.
2 Card Transaction
Transaction to be
Card to card transfer
reversed (R) latest within ₹100/- per day of
Card account debited but the
a T+1 day, if credit is not delay beyond T+1
beneficiary card account not
effected to the day.
credited.
beneficiary account.
Point of Sale (PoS) (Card ₹100/- per day of
Auto-reversal within T+5
b Present) including Cash at delay beyond T+5
days.
PoS days
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Sr. Framework for auto-reversal and

Description of the incident
No. compensation
Account debited but
confirmation not received at
merchant location i.e.,
charge-slip not generated.
Card Not Present (CNP) (e-
commerce)
c Account debited but
confirmation not received at
merchant’s system.
3 Immediate Payment System (IMPS)
If unable to credit to
Account debited but the beneficiary account, auto ₹100/- per day if
a beneficiary account is not reversal (R) by the delay is beyond T+1
credited. Beneficiary bank latest day.
on T+1 day.
4 Unified Payments Interface (UPI)
If unable to credit the
Account debited but the beneficiary account, auto ₹100/- per day if
a beneficiary account is not reversal (R) by the delay is beyond T+1
credited (transfer of funds). Beneficiary bank latest day.
on T+1 day.
Account debited but
transaction confirmation not ₹100/- per day if
Auto-reversal within T+5
b received at merchant delay is beyond T+5
days.
location (payment to days.
merchant).
5 Aadhaar Enabled Payment System (including Aadhaar Pay)
Account debited but
transaction confirmation not
a
received at merchant Acquirer to initiate ₹100/- per day if
location. “Credit Adjustment” delay is beyond T+5
Account debited but within T+5 days. days.
b beneficiary account not
credited.
6 Aadhaar Payment Bridge System (APBS)
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Sr. Framework for auto-reversal and

Description of the incident
No. compensation
Beneficiary bank to ₹100/- per day if
Delay in crediting
a reverse the transaction delay is beyond T+1
beneficiary’s account.
within T+1 day. day.
7 National Automated Clearing House (NACH)
Beneficiary bank to
Delay in crediting ₹100/- per day if
reverse the uncredited
a beneficiary’s account or delay is beyond T+1
transaction within T+1
reversal of amount. day.
day.
Customer’s bank will be
Account debited despite
responsible for such
revocation of debit mandate
b debit. Resolution to be
with the bank by the
completed within T+1
customer.
day.
8 Prepaid Payment Instruments (PPIs) – Cards / Wallets
Off-Us transaction
a
The transaction will ride on UPI, card network, IMPS, etc., as the case may be.
The TAT and compensation rule of respective system shall apply.
On-Us transaction

Beneficiary’s PPI not Reversal effected in ₹100/- per day if

b credited. Remitter’s account within delay is beyond T+1
PPI debited but transaction T+1 day. day
confirmation not received at
merchant location.

Acceptance of the compensation by the customers under this policy shall be deemed to
be final settlement of all issues arising out of grievances for which compensation is
claimed.

15. Compensation for events like fire, theft, burglary, dacoity, robbery, building
collapse or in case of fraud committed by the employees of the bank towards Safe
Deposit Lockers
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In instances where loss of contents of locker are due to incidents mentioned above, the
banks’ liability shall be for an amount equivalent to one hundred times the prevailing
annual rent of the safe deposit locker.

16. Force Majeure

The Bank shall not be liable to compensate customers for delayed credit if some
unforeseen event (including but not limited to civil commotion, sabotage, lockout,
accident, fire, natural disaster or other “Acts of God”, war, damage to the Bank’s
facilities or of its correspondent bank(s), etc.) beyond the control of the Bank prevents it
from performing its obligations within the specified service delivery parameters.

Last Reviewed Date: May 19, 2023.