If your payment gateway transaction fails or your dispute remains unresolved, you now have multiple structured escalation paths under RBI’s current framework. These include the Internal Ombudsman at your PPI issuer (mandatory for non-bank PPIs with over one crore instruments outstanding), the Reserve Bank – Integrated Ombudsman Scheme, 2026 (effective July 1, 2026), and the Online Dispute Resolution (ODR) system mandated under DPSS.CO.PD No.116/02.12.004/2020-21 dated August 6, 2020. This guide walks you through each escalation layer so you can get your issue resolved faster.
Quick Summary: What are the Key Grievance Redressal Mechanisms?
- Non-bank PPI issuers with one crore or more instruments outstanding must appoint an Internal Ombudsman (IO) under the Reserve Bank of India (Non-Bank Prepaid Payment Instruments Issuers – Internal Ombudsman) Directions, 2026.
- All PPI issuers must maintain a publicly disclosed grievance redressal framework with a named nodal officer and defined turn-around-times, as per the Master Direction on Prepaid Payment Instruments (PPIs), 2026.
- Customers can escalate unresolved complaints to the Reserve Bank – Integrated Ombudsman Scheme, 2026 via the Complaint Management System portal at cms.rbi.org.in.
- ODR systems must provide a unique reference number for every dispute lodged, enabling end-to-end tracking by the customer, as per DPSS.CO.PD No.116/02.12.004/2020-21.
How Does the RBI Grievance Redress Framework Work for Payment Gateways in 2026?
The framework operates in three tiers. First, you raise the complaint directly with your payment gateway or PPI issuer. Second, if the issuer rejects or only partially resolves your complaint, the matter is auto-escalated to the Internal Ombudsman (IO) or Deputy IO within the issuer organisation. Third, if you remain dissatisfied, you can approach the RBI Ombudsman.
Under the Reserve Bank of India (Non-Bank Prepaid Payment Instruments Issuers – Internal Ombudsman) Directions, 2026, applicable to PPI issuers with one crore or more outstanding PPIs as on March 31 of the previous financial year (i.e., March 31, 2026, for the current FY 2026-27), all complaints classified as ‘Partially Resolved’ or ‘Wholly Rejected’ by the internal mechanism must be auto-escalated to the IO. The IO then has either 20 days from receipt, or at least 10 days before any RBI-prescribed deadline for that complaint category, to complete the review. The final decision must be communicated to you within 30 days of the issuer receiving the complaint.
What Should You Do Before Contacting Your Payment Gateway Support Team?
Before you reach out, gather the transaction reference number, date and time of the transaction, the amount debited, and any screenshots or SMS confirmations showing the failure or discrepancy. If you are reporting an unauthorised PPI transaction, note the exact time you first noticed it — this determines your exposure under the applicable limiting customer liability rules.
As per clause 15(b) of the Master Direction on Prepaid Payment Instruments (PPIs), 2026, every PPI issuer is required to maintain a formal, publicly disclosed customer grievance redressal framework. This means their website or app should display the nodal officer’s contact details, the escalation matrix, and the promised turn-around-times for resolution. Check this information on the issuer’s website before filing — it tells you exactly whom to contact and what timeline to expect.
How Do You Escalate a Complaint Step by Step Under the RBI Framework?
Follow these five steps to move through the three-tier escalation structure correctly, so your complaint is not dismissed on technical grounds.
- Step 1 — Lodge the complaint with your PPI issuer or payment gateway. Use the issuer’s app, website, call centre, or branch. Under clause 15(b) of the Master Direction on Prepaid Payment Instruments (PPIs), 2026, the issuer must provide multiple channels for lodging complaints. Note the unique reference number you receive — you will need it at every subsequent stage.
- Step 2 — Wait for the prescribed resolution window. For complaints where RBI or NPCI guidelines specify a turn-around-time, the issuer must resolve the matter within that timeline. For all other complaints, clause 9 of the Reserve Bank of India (Non-Bank Prepaid Payment Instruments Issuers – Internal Ombudsman) Directions, 2026 requires the final decision to be communicated within 30 days of receipt by the issuer.
- Step 3 — Check the classification of the decision. Under clause 14(2) of the Internal Ombudsman Directions, 2026, the issuer’s system must classify every complaint as ‘Fully Resolved’, ‘Partially Resolved’, or ‘Wholly Rejected’. Only complaints in the latter two categories are auto-escalated to the Internal Ombudsman or Deputy IO.
- Step 4 — Receive the IO’s decision or escalate further. The IO or Dy. IO reviews the complaint and either upholds or modifies the issuer’s decision. As per clause 11 of the Internal Ombudsman Directions, 2026, if the IO upholds the rejection, the reply to you must explicitly state that the complaint was reviewed by the IO. You must also be informed of your right to approach the RBI Ombudsman and given the URL https://cms.rbi.org.in.
- Step 5 — File with the RBI Ombudsman if still dissatisfied. Use the Complaint Management System portal at https://cms.rbi.org.in. As per clause 13 of the Internal Ombudsman Directions, 2026, the PPI issuer must mandatorily include the IO’s decision when submitting information to the RBI Ombudsman for any complaint already reviewed by the IO.
What Are the Key Timelines at Each Escalation Stage?
The table below summarises the maximum turn-around-times at each stage. These are outer limits — the issuer or IO may resolve your complaint sooner.
| Escalation Stage | Governing Direction | Maximum Timeline | What Triggers the Clock |
|---|---|---|---|
| PPI Issuer — first response | Clause 15(b), MD-PPIs, 2026 | As per publicly disclosed TAT in escalation matrix | Date complaint is lodged by customer |
| PPI Issuer — final decision (general complaints) | Clause 9, Internal Ombudsman Directions, 2026 | 30 days | Date of receipt of complaint by the PPI issuer |
| Internal Ombudsman — review (RBI-prescribed TAT complaints) | Clause 14(1)(a), Internal Ombudsman Directions, 2026 | At least 10 days before the RBI-prescribed deadline | Date complaint is escalated to IO by the system |
| Internal Ombudsman — review (all other complaints) | Clause 14(1)(b), Internal Ombudsman Directions, 2026 | 20 days | Date complaint is escalated to IO by the system |
| RBI Ombudsman — if complaint still unresolved | Reserve Bank – Integrated Ombudsman Scheme, 2026 | As per Scheme timelines | Date complaint is filed on https://cms.rbi.org.in |
Worked Example: How the Timelines Play Out for a Failed UPI Transaction
Suppose you initiate a UPI payment of ₹8,500 on June 15, 2026, but the amount is debited from your account and the merchant does not receive it. You lodge a complaint with your PPI issuer on June 16, 2026 and receive a unique reference number. Under the Annex to DPSS.CO.PD No.629/02.01.014/2019-20 dated September 20, 2019, a UPI ‘account debited but beneficiary not credited’ transaction must be auto-reversed within T + 1 day, with compensation of ₹100 per day of delay beyond that. If the issuer fails to resolve it within the prescribed TAT and classifies your complaint as ‘Wholly Rejected’ on June 20, the complaint is auto-escalated to the Internal Ombudsman.
The IO then has 20 days from June 20 to complete the review. The final decision must be communicated to you by July 16, 2026 — that is, within 30 days of the issuer’s original receipt of the complaint on June 16. If the IO upholds the rejection, you receive the IO’s decision in writing along with instructions to approach the RBI Ombudsman at https://cms.rbi.org.in.
What Documents and Information Do You Need Before Filing a Complaint?
Having the right documentation ready before you file can cut your resolution time significantly. Under clause 15(a) of the Master Direction on Prepaid Payment Instruments (PPIs), 2026, every PPI issuer must disclose all features, charges, validity periods, and terms in clear language at the time of issuance. This means the issuer’s documentation — including the terms displayed on their app or website at the time you loaded or used the PPI — becomes part of the evidence record.
Gather the following before you approach any escalation tier:
- Transaction reference number and exact date/time of the failed or disputed transaction.
- Screenshot or copy of the debit entry in your bank statement or wallet balance showing the amount and beneficiary details.
- SMS or email notifications received from the PPI issuer or bank at the time of the transaction.
- For e-mandate disputes, the pre-transaction notification sent by the issuer under clause 6(a) of the Digital Payments – E-mandate Framework, 2026. This must be sent at least 24 hours before the debit.
- Any prior complaint reference numbers and copies of correspondence with the PPI issuer.
If your complaint involves an unauthorised recurring transaction under an e-mandate, note that under clause 8(a) of the Digital Payments – E-mandate Framework, 2026, all recurring transactions up to ₹15,000 per transaction may be processed without additional factor of authentication (AFA), while transactions above this amount require AFA. For insurance premiums, mutual fund subscriptions, and credit card bill payments, the threshold is ₹1,00,000 per transaction. This distinction matters when arguing whether the issuer followed the prescribed authentication protocol.
How Do You Use the Online Dispute Resolution (ODR) System for Digital Payments?
The ODR system was mandated under DPSS.CO.PD No.116/02.12.004/2020-21 dated August 6, 2020, issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007. It applies to all authorised Payment System Operators (PSOs) — both banks and non-banks — and their participating members. The system is designed to be rule-based, transparent, and system-driven with zero or minimal manual intervention.
Under paragraph 5.1 of the Annex to that circular, customers must be provided with multiple channels to lodge disputes — web-based forms, IVR, mobile app, call centre, SMS, or through branches. For mobile-based systems like UPI, third-party app providers (TPAPs) must also offer an in-app dispute filing facility integrated with the PSO’s ODR system. Once lodged, the system generates a unique reference number that lets you track the dispute’s status end-to-end.
The ODR system initially covered disputes related to failed transactions. Per paragraph 4.1 of the Annex, the scope includes all transaction types referenced in DPSS.CO.PD No.629/02.01.014/2019-20 dated September 20, 2019, which harmonised turn-around-times and compensation for failed transactions across all authorised payment systems. If your grievance remains unresolved for one month through the ODR route, paragraph 4 of the circular explicitly states you may approach the Reserve Bank – Integrated Ombudsman Scheme, 2026 (as amended).
Under clause 15(d) of the Master Direction on Prepaid Payment Instruments (PPIs), 2026, every PPI holder has recourse to the Reserve Bank – Integrated Ombudsman Scheme, 2026. The PPI issuer’s grievance framework must reference this, and the issuer must also be guided by the ODR framework in DPSS.CO.PD No.116/02.12.004/2020-21. This means you can use the ODR system as your first structured escalation step even before approaching the Internal Ombudsman, especially for straightforward failed-transaction disputes.
What Compensation Are You Entitled to If the Issuer Delays Resolution?
The compensation framework is laid out in the Annex to DPSS.CO.PD No.629/02.01.014/2019-20 dated September 20, 2019, issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007. It applies across all authorised payment systems including UPI, IMPS, card transactions, NACH, and PPIs.
For UPI transactions where your account is debited but the beneficiary account is not credited, the beneficiary bank must initiate auto-reversal within T + 1 day (where T is the date of the transaction). If the reversal is delayed beyond this, compensation of ₹100 per day is payable for each day of delay beyond T + 1. For UPI merchant payments where the debit occurs but confirmation is not received at the merchant location, the auto-reversal window is T + 5 days, with ₹100 per day compensation for delay beyond that window.
For PPI on-us transactions where the beneficiary’s PPI is not credited, reversal must be effected in the remitter’s account within T + 1 day, with ₹100 per day compensation for any delay beyond that. Per paragraph 6 of the 2019 circular, this compensation must be effected suo moto to the customer’s account — the issuer cannot wait for you to file a complaint.
Consider two scenarios. In Scenario A, you transfer ₹3,000 from your PPI wallet to another wallet held with the same issuer (an on-Us transaction), and the beneficiary is not credited. Under the Annex to DPSS.CO.PD No.629/02.01.014/2019-20 dated September 20, 2019, the issuer must reverse the transaction within T + 1 day. If the issuer fails and you lodge a complaint, the IO must review it within 20 days of escalation under clause 14(1)(b) of the Internal Ombudsman Directions, 2026, and the final decision must be communicated within 30 days of the original complaint under clause 9.
In Scenario B, you use your PPI wallet to pay a merchant ₹12,000, but the transaction fails at the acquiring bank (an off-Us transaction riding on UPI). Here, the TAT and compensation framework of the respective payment system — UPI — applies. Per the same Annex, UPI merchant transactions must auto-reverse within T + 5 days, with compensation of ₹100 per day of delay beyond that. If the PPI issuer rejects your complaint, the IO review and 30-day final decision timelines under the Internal Ombudsman Directions still apply.
How Does the Cross-Border Inward Payment Framework Affect Your Dispute Rights?
If your complaint involves a cross-border inward payment — for instance, a foreign remittance credited to your PPI or bank account — the guidelines issued under RBI/2026-27/08 dated April 9, 2026 on facilitating faster cross-border inward payments impose additional obligations on banks. Banks must now inform customers of receipt of inward transactions immediately, undertake nostro reconciliation at intervals not exceeding one hour, and endeavour to credit inward payments received during foreign exchange market hours within the same business day.
If your bank fails to meet these standards and your funds are delayed, you can cite this circular when lodging your complaint. The failure to comply with the one-hour reconciliation requirement or the same-day credit obligation strengthens your case at both the IO and Ombudsman stages. The dispute resolution framework under the Internal Ombudsman Directions, 2026 and the ODR system under DPSS.CO.PD No.116/02.12.004/2020-21 applies to these complaints as well, since the bank or PPI issuer remains the first point of contact.
What Should You Do Next?
- Bookmark the RBI CMS portal at https://cms.rbi.org.in now, before you need it. Having the link ready saves critical time when a dispute is unresolved and you need to escalate.
- Save your PPI issuer’s nodal officer contact details from the issuer’s website or app. Under clause 15(b) of the Master Direction on Prepaid Payment Instruments (MD-PPIs), 2026, this information must be publicly disclosed. Screenshot it for quick reference.
- Record every transaction failure immediately. Note the reference number, timestamp, amount, and the channel used (UPI, card, wallet, IMPS). For UPI failures, the Annex to DPSS.CO.PD No.629/02.01.014/2019-20 dated September 20, 2019 specifies auto-reversal within T+1 day for credit-to-beneficiary failures. If reversal does not happen within that window, you have grounds for a formal complaint.
- Check your transaction classification before escalating. Under clause 14(2) of the Reserve Bank of India (Non-Bank Prepaid Payment Instruments Issuers – Internal Ombudsman) Directions, 2026, only complaints classified as ‘Partially Resolved’ or ‘Wholly Rejected’ are auto-escalated to the IO. If your complaint is marked ‘Fully Resolved’ but you disagree, you may need to approach the RBI Ombudsman directly.
- Track the 30-day outer limit. Per clause 9 of the Internal Ombudsman Directions, 2026, the final decision on your complaint must be communicated within 30 days of the issuer receiving it. If you have not received a decision by day 30, escalate immediately to the RBI Ombudsman via https://cms.rbi.org.in.
- Verify whether your PPI issuer falls under the mandatory IO requirement. The Internal Ombudsman Directions, 2026 apply to non-bank PPI issuers with more than one crore instruments outstanding as on March 31, 2025. If your issuer meets this threshold, the IO review layer is available to you. If not, your escalation path runs directly from the issuer to the RBI Ombudsman.
Common Pitfalls to Avoid
Based on our experience, here are the compliance mistakes taxpayers often make:
- Letting Failed Transaction Timestamps Expire – Customers often delay lodging formal complaints beyond the threshold windows, which dilutes their leverage when asserting rights under the suo moto auto-reversal penalty metrics.
- Accepting Partial In-App Clearances Blindly – Settling for partial customer support tokens inside third-party apps without getting a unified cross-referenced ODR system ticket closes down future auto-escalation functionality.
- Misinterpreting E-Mandate Slabs – Erroneously expecting AFA validation exemptions on transactions that comfortably bypass the newly established standard categories results in wasted compliance disputes.
Frequently Asked Questions
How do I check if my payment gateway or PPI issuer has an Internal Ombudsman?
The Reserve Bank of India (Non-Bank Prepaid Payment Instruments Issuers – Internal Ombudsman) Directions, 2026 apply to non-bank PPI issuers with more than one crore prepaid payment instruments outstanding as on March 31, 2025. If your issuer meets this threshold, they are required to appoint an IO or Deputy IO and disclose this on their grievance redressal page. You can also check the issuer’s publicly disclosed escalation matrix, which is mandated under clause 15(b) of the Master Direction on Prepaid Payment Instruments (MD-PPIs), 2026. If the issuer is below the one-crore threshold, they are not required to appoint an IO, and your escalation runs directly to the RBI Ombudsman.
What happens if my PPI issuer does not resolve my complaint within 30 days?
Under clause 9 of the Reserve Bank of India (Non-Bank Prepaid Payment Instruments Issuers – Internal Ombudsman) Directions, 2026, the final decision must be communicated to you within 30 days of the issuer receiving the complaint. If the issuer fails to resolve the matter within this period, you have the right to escalate to the Reserve Bank – Integrated Ombudsman Scheme, 2026. File your complaint on the CMS portal at https://cms.rbi.org.in. As per clause 13 of the Internal Ombudsman Directions, 2026, the issuer must include the IO’s decision in the submission to the RBI Ombudsman if the complaint was already reviewed by the IO.
Can I use the Online Dispute Resolution (ODR) system for disputes other than failed transactions?
Initially, the ODR system mandated under DPSS.CO.PD No.116/02.12.004/2020-21 dated August 6, 2020 was introduced specifically for disputes related to failed transactions. However, paragraph 4 of that circular states that based on experience gained, the ODR arrangement would later be extended to cover disputes and grievances other than failed transactions. As per clause 15(d)(ii) of the Master Direction on Prepaid Payment Instruments (MD-PPIs), 2026, PPI issuers must be guided by the ODR framework as amended from time to time. Check with your PPI issuer on their website or app to confirm whether their ODR system currently covers dispute types beyond failed transactions such as delayed refunds or unauthorised debits.
What compensation am I entitled to if my failed UPI transaction is not reversed on time?
As per the Annex to DPSS.CO.PD No.629/02.01.014/2019-20 dated September 20, 2019, for UPI transactions where the account is debited but the beneficiary account is not credited, auto-reversal must be completed by the beneficiary bank within T+1 day. If the delay exceeds T+1 day, compensation of Rs 100 per day is payable. This compensation must be credited to the customer’s account suo moto by the bank, without waiting for a complaint or claim from the customer, as stated in paragraph 5 of the same circular. If the bank fails to pay this compensation, you can lodge a complaint through the issuer’s grievance redressal channel and escalate to the RBI Ombudsman via https://cms.rbi.org.in if unresolved.
Can I approach the RBI Ombudsman directly without first complaining to my PPI issuer?
No. The Reserve Bank – Integrated Ombudsman Scheme, 2026 requires that you first exhaust the PPI issuer’s internal grievance redress mechanism, including the Internal Ombudsman review where applicable. Clause 12 of the Reserve Bank of India (Non-Bank Prepaid Payment Instruments Issuers – Internal Ombudsman) Directions, 2026 explicitly states that the PPI issuer must advise you of the RBI Ombudsman option only after the IO or Dy. IO has reviewed the complaint and the reply has been communicated. If you approach the RBI Ombudsman prematurely, the complaint will typically be returned to the issuer for completion of the mandatory internal process.
What compensation am I entitled to if my payment gateway fails to reverse a failed transaction within the prescribed TAT?
Under the Annex to DPSS.CO.PD No.629/02.01.014/2019-20 dated September 20, 2019, compensation of Rs 100 per day is payable for each day of delay beyond the prescribed turn-around-time. For UPI and IMPS transactions where the beneficiary account is not credited, the auto-reversal must happen by T plus 1 day — meaning one business day after the transaction. For ATM, PoS, and certain PPI transactions, the outer limit is T plus 5 days. The compensation must be credited suo moto to your account without you having to file a separate claim, as stated in paragraph 5 of the same circular.
How do I track the status of my complaint after it has been escalated to the Internal Ombudsman?
Under clause 5.4 of the Annex to DPSS.CO.PD No.116/02.12.004/2020-21 dated August 6, 2020, every ODR system must allocate a unique reference number at the time the dispute is lodged and provide a facility to track the complaint status using that number. Since the Internal Ombudsman Directions, 2026 mandate a fully automated Complaints Management System, you should be able to track your complaint through the same channel you used to lodge it — whether that is the issuer’s app, website, or call centre. If the IO upholds the rejection, clause 11 of the Internal Ombudsman Directions requires the reply to explicitly confirm the IO has reviewed the case, giving you a clear audit trail.
Is the e-mandate framework relevant to payment gateway disputes, and what is the AFA threshold for recurring transactions?
Yes. The Digital Payments – E-mandate Framework, 2026 (RBI/CO.DPSS.POLC.No.S56/02.14.003/2026-27) applies to all Payment System Providers and Participants processing recurring transactions via cards, PPIs, or UPI. Under clause 8(a), all recurring transactions up to Rs 15,000 per transaction may be authorised without additional factor of authentication (AFA). For specific categories — insurance premiums, mutual fund subscriptions, and credit card bill payments — the threshold is Rs 1,00,000 per transaction under clause 8(b). If your dispute involves a recurring charge that exceeded these limits without AFA validation, you have a strong ground for complaint under clause 9 of the e-mandate framework, which mandates a dispute redressal system and applicability of tax-saving investments like Section 80C limits for unauthorized routing structures.
Sources
- Reserve Bank of India — Master Direction on Prepaid Payment Instruments (MD-PPIs), 2026
- Reserve Bank of India — Online Dispute Resolution (ODR) System for Digital Payments (DPSS.CO.PD No.116/02.12.004/2020-21)
- Reserve Bank of India — Harmonisation of TAT and Compensation for Failed Transactions (DPSS.CO.PD No.629/02.01.014/2019-20)
- Reserve Bank of India — Non-Bank PPI Issuers Internal Ombudsman Directions, 2026
- Reserve Bank of India — Index to RBI Circulars
- Reserve Bank of India — Master Directions Index
- Reserve Bank of India — Digital Payments E-mandate Framework, 2026
- Reserve Bank of India — Guidelines on Faster Cross-Border Inward Payments (RBI/2026-27/08)
Take action today: If you have an unresolved payment gateway dispute, log in to your PPI issuer’s app or website right now, locate the publicly disclosed grievance redressal framework as required under clause 15(b) of the MD-PPIs, 2026, and file your complaint with the unique reference number handy. If the issuer does not resolve it within 30 days, escalate to the Internal Ombudsman and then to the RBI Ombudsman at https://cms.rbi.org.in. Every day of delay beyond the prescribed TAT could entitle you to Rs 100 per day in compensation — so do not let your complaint go untracked.
Article Information
Published: June 13, 2026
Last Reviewed: June 13, 2026
Category: RBI
Regulatory Body: Reserve Bank of India (RBI)
Written by C.K. Gupta, M.Com & Tax Editor at TaxGST.in — covering RBI policy changes, banking regulations, and FLA compliance for businesses since 2009.
Official Resources
Disclaimer: This article is for informational purposes only. Banking regulations and policy rates may change. Always refer to the original RBI circular for authoritative information. Contact your bank for specific queries about your accounts.
Discover more from TaxGst.in
Subscribe to get the latest posts sent to your email.
