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

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Preeti Kulkarni

, ET BureauLast Updated: Dec 02, 2019, 11:05:00 AM IST

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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.

Compensation-getty — A penalty of Rs 100 per day will be paid if ATM failed transaction is not reversed within 6 days.

Financial service providers have to pay penalty to customers if they fail to adhere to deadlines when fulfilling commitments.

Life insurance

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

Mutual funds

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