RBI Ombudsman Complaint After Failed Refund

One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.

Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.

TL;DR: If a merchant takes your money and never delivers, and the bank then sits on your dispute for weeks, an RBI Ombudsman complaint is the fastest route to a reasoned order. But the Ombudsman treats a refund as the end of the story unless you refuse, in writing, to let the file be closed as a mutual settlement. Refuse it, and you keep both a reasoned order and your other remedies.

On 12 June, the client booked a hotel room through MakeMyTrip and paid with an HDFC Bank credit card routed through BHIM UPI. The amount, a little over three thousand rupees, left the account in seconds. The booking never confirmed on the app.

He waited a fortnight, then wrote to MakeMyTrip. They confirmed they had received the payment and admitted the booking had failed at their end. On 4 July, the bank's Principal Nodal Officer asked for written consent to raise a chargeback. The client replied the same day, consent attached.

Three days later, MakeMyTrip confirmed that a refund had been initiated. On 15 July the money came back to the card. Between 4 July and 14 August, the bank's nodal office said nothing. When it finally did speak, it admitted it had never raised a dispute ticket at all.

That silence is where the client approached the Chamber of Advocate Sudhir Rao. The office placed a rejoinder on record on 15 August, refusing in writing to let the complaint be closed as a mutual settlement. On 2 September the Ombudsman closed it anyway, holding that there was no deficiency in service. The chamber's drafting of that rejoinder is what kept the file from being buried under a settlement clause, and the client walked away with a reasoned order on the record instead of a silent handshake. Advocate Sudhir Rao's working knowledge of how these closure provisions are worded is what secured that outcome for the client.

Key Facts of the Case

• A hotel booking paid through a credit card linked to BHIM UPI failed at the merchant's end, but the money was debited instantly.
• The merchant confirmed receipt of payment and later confirmed that a refund had been initiated.
• The bank's Principal Nodal Officer sought written consent to raise a chargeback; the client gave it on the same day.
• The bank then stayed silent for over forty days and admitted that no dispute ticket had ever been raised.
• The principal amount was eventually credited back to the card.
• The client filed a rejoinder expressly refusing closure on the ground of mutual settlement.
• The Ombudsman still closed the complaint, holding that there was no deficiency in service on the bank's part.
• Both the delay compensation claim and the damages claim for service deficiency were rejected.

The Direct Legal Answer

Does the per-day penalty for delayed refunds apply when the merchant took the money?

On the reasoning adopted in this case, no. The Turn Around Time framework that carries the per-day penalty of one hundred rupees is aimed at technical failures in the payment pipeline, a UPI switch dropping a transaction, a system error. Where the merchant received the funds and simply failed to fulfil the booking, the Ombudsman treated it as a merchant-side commercial failure rather than a payment-system failure. That is a defensible reading, though not the only possible one.

Was the bank let off for forty days of silence?

Effectively, yes. Because the principal amount had been credited, the Ombudsman considered summary disposal sufficient and did not go into the bank's failure to raise a dispute ticket after taking written consent.

Is an RBI Ombudsman complaint worth filing at all?

Yes, for the money. And yes, for the record, if you block the settlement closure in writing.

Advice in Such Cases

Consult with Lawyer: The very basic and important step to is to put the paper in order before you write to anyone else. Banks answer documents, not narratives. Pull out the transaction reference, the merchant's written admission, the nodal officer's email asking for chargeback consent, your reply to it, and the credit entry showing the refund. Arrange them by date. If you have already slipped somewhere — signed a settlement form without reading the fine print, let a deadline pass, sent a sharp email at midnight — say so in the first consultation. It changes the strategy, not usually the outcome.

• Give chargeback consent in writing and diary the date. Consent given over a phone call is consent you cannot prove. An email reply with the consent attached, and a screenshot of the sent folder, is worth more than three follow-ups.
• Never let a complaint be closed as a mutual settlement unless the bank has paid everything you are claiming. A settlement closure is a handshake, not an order. Say so in writing, in one paragraph, and keep a copy.
• Treat the refund and the delay as two separate claims. Once the principal is credited, the bank will argue the grievance is over. It is not, unless you have abandoned the compensation claim.
• Keep the merchant in the frame. An order against the bank binds the bank. It says nothing about a booking platform that took money for a room it never confirmed.
• Watch the clock. Give the bank its thirty days, then move. Files that sit for eight months are harder to persuade anyone to touch.
• Do not run two forums in parallel without advice. The Ombudsman scheme expects you not to be pursuing the same grievance elsewhere at the same time, and a consumer commission can take a dim view of it too.

Is an RBI Ombudsman Complaint Worth Filing When the Money Is Already Back?

For the principal amount, no — that fight is over. For the delay compensation and for a reasoned order you can carry into another forum, yes, provided you file it correctly and refuse a settlement closure in writing.

The RBI Integrated Ombudsman Scheme, 2021 covers banks, non-banking finance companies and prepaid instrument issuers. Complaints go through the RBI's Complaint Management System, and the process itself is free. What it is not is a court. The Ombudsman looks at whether the regulated entity was deficient. If the bank's only visible failure is silence after taking your consent to raise a chargeback, and the money has come back, some Ombudsmen will call that a service gap worth compensating and others will call it closed. We only have one side of this file, and the order in it went the second way.

How the Process Runs, Step by Step

• Step one — write to the bank. Not the branch. The Principal Nodal Officer. Set out the transaction reference, the amount, what the merchant admitted, and what you want. You generally have to give the bank thirty days to reply before the Ombudsman will look at it.
• Step two — wait out the thirty days, then file. Broadly, you have one year from the bank's reply, or from the expiry of that thirty-day window where there is no reply, to file with the Ombudsman. Confirm the current wording of the scheme before you rely on the outer edge of that window.
• Step three — the Ombudsman takes it up. The scheme asks for resolution as far as possible within thirty days, extendable to ninety where the complaint needs further scrutiny or the bank needs to be heard properly.
• Step four — the closure question. If the bank offers the money back and asks for the file to be closed as settled, you can refuse. Refuse in writing, on the record. That is the single sentence in this whole process that decides whether you get a reasoned order or a quiet ending.
• Step five — the order. You get either an award or a reasoned rejection. An award is binding on the bank. A rejection is still a document, and a document is what you need if you are going to argue the same facts somewhere else.

The Merchant Does Not Get a Free Pass

The Ombudsman route is against your bank. It does not touch the hotel, the platform, or whoever took the money and did not deliver. On these facts the merchant had already admitted the payment and already refunded, so there was little left to chase. Where a merchant takes money and never delivers, and the pattern suggests it never intended to, two other tracks open up.

• A consumer complaint. Under the Consumer Protection Act, 2019, a complaint can be filed before the District Commission, which hears claims up to fifty lakh rupees. Filing is online through the e-Daakhil portal, and the fee is nil for claims up to five lakh rupees. The limitation is two years from the date the problem arose. The Consumer Protection (E-Commerce) Rules, 2020 also place duties on online marketplaces, including a grievance officer and timelines for acknowledging complaints.
• A criminal complaint. Where the merchant took payment knowing it could not deliver, that is the cheating offence under the Bharatiya Nyaya Sanhita, 2023. For online money trails, the National Cyber Crime Reporting Portal and the 1930 helpline are the usual starting points. This track is about the merchant, not the bank, and it is slow.

Where a merchant is a company with something to lose, a well-drafted consumer complaint often moves faster than anything else. Where it has vanished, no forum will help you and the money is simply gone.

What This Costs You in Time

Realistically, three to five months from the first email to the nodal officer. The Ombudsman route costs nothing but patience. A consumer complaint costs nothing up to five lakh rupees. The cost that matters is drafting: a complaint that pleads the wrong framework, or asks for a penalty the scheme does not provide for, is the most common reason a small claim dies. That is what the rejoinder in this file was for.

Frequently Asked Questions