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    Compensation you get for poor services offered by insurers, banks, mutual funds, tax department

    Synopsis

    Did you know that financial services providers like banks, insurers and fund houses have to pay a penalty to you if they don't meet deadlines? Even the tax department is not free from this. Here is the compensation you can claim for poor services.

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    A penalty of Rs 100 per day will be paid if ATM failed transaction is not reversed within 6 days.
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    Financial service providers have to pay penalty to customers if they fail to adhere to deadlines when fulfilling commitments.

    Failure to pay death claims on time
    • Deadline for raising queries after claim filed 15 days
    • Claim approvals or rejections: Within 30 days from date of receipt of relevant documents and clarifications
    • Penalty Interest @ 2% above bank rate (currently 5.4%) on claim payable from date of receipt of last necessary document

    If investigations required
    • Probe to be completed in 90 days
    • Claim to be paid or rejected within 30 days of investigations
    • Penalty Interest @ 2% above bank rate on claim payable from date of receipt of last necessary document

    Delay in settling maturity, survival benefit and annuity claims
    • Life insurer should intimate policyholders ahead of due date, send post-dated cheque or credit proceeds to the registered account on due date
    • Penalty: Interest @ 2% above bank rate payable from the date of receipt of last necessary document

    Refund delay after free-look cancellation, surrender, withdrawal, request for return of proposal deposit
    • Deadline for disbursing refunds: Within 15 days of receipt of request or last necessary document
    • Penalty: Interest of 2% over bank rate from the date of request or receipt of last necessary document, whichever is later

    Delay in paying redemption proceeds or dividend
    • Deadline: 10 days from date of request or 30 days of dividend declaration
    • Penalty: 15% interest for period of delay

    • General insurance
    Failure to settle claim on time
    • Deadline for rejecting or approving claim: 30 days of receiving final survey report and relevant information
    • Penalty: Interest @ 2% above bank rate from date of receipt of last relevant document till date of claim payment

    • Health insurance
    Delay in claim settlement
    • Deadline: Within 30 days of receipt of last necessary documents (regular cases)
    • If investigation needed: Has to be completed within 30 days from date of receipt of last necessary document. Claim to be settled within 45 days after receiving all documents.
    • Penalty: Interest @ 2% above bank rate from date of receipt of last relevant document till date of claim payment

    • Banks
    Customer’s account debited but cash not dispensed at ATM
    • Deadline for reversing transaction: 6 days (date of transaction plus 5 days)
    • Penalty: Rs 100 per day of delay beyond T + 5 days

    Card account debited but beneficiary card account not credited
    • Deadline for reversing transaction: T+1 day
    • Penalty: Rs 100 per day of delay beyond deadline

    In POS, account debited but charge slip not generated
    • Deadline for reversing transaction: T+5 days
    • Penalty: Rs 100 per day

    Card debited but e-commerce transaction not through
    • Deadline for reversing transaction: T+5 days
    • Penalty: Rs 100 per day

    Account debited but beneficiary account not credited in case of IMPS transfer
    Failed UPI transfer
    • Failure of fund transfer, online purchase while using prepaid wallet proprietary payment system
    • Deadline for reversing transaction: T+1 day
    • Penalty: Rs 100 per day

    *Note: In case of transaction on prepaid wallet platforms using cards, UPI or IMPS, the respective service’s reversal and compensation rules will apply Source: IRDAI, SEBI and RBI

    • Taxation
    Refunds not paid on time

    Refund if excess amount paid as advance tax or TDS
    • Deadline: If returns filed before 31 July, interest will be paid from 1 April of assessment year to date of payout. If filed later, the period will start from then.
    • Penalty: Interest on refund due at the rate of 0.5% per month; if the refund due is less than 10% of tax liability, no interest will be paid

    Refund if excess self-assessment tax paid
    • Deadline: Relevant period for interest payment will start from date of tax payment or return submission, whichever is later
    • Penalty: Interest on refund due at rate of 0.5% per month; if refund due is less than 10% of tax liability, no interest will be paid

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    5 Comments on this Story

    Dilip Velankar289 days ago
    These are good steps. One can. go to consumer court or Bank ombudsman for speedy decision. One more service should be added. Bank should give alert for minimum balance and give atleast 5 working days time to bring the account balance to minimum level. Now a days banks are earning huge amount by charging heavy penalty for minimum balance, why?
    karodo rupees deposit without interest banks are thus using for making profit and on top of it charging penalties for minimum balance, nothing but robbery.
    Raj Tillan291 days ago
    ihave been victim of poor servic eby BoB wrong info given to IT and resulted in paying higher Income tax. complaint made made to go from pillar to pose given up '' Regulators are quasi-judicaal arm of they are supposed to regulate. like electricity regulators .. hardly award interest though statutorily required
    Thomas Pallickaparampil291 days ago
    Which authority will grant you the relief.If it is civil court it is better to opt for death by drowning.
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