NPCI Introduces New UPI Rule for Automatic Acceptance and Rejection of Chargebacks from February 15, 2025.

Banking & Finance

In February 2025, the National Payments Corporation of India (NPCI), based in Mumbai (Maharashtra), introduced a new rule to streamline chargeback management in Unified Payments Interface (UPI) transactions.


      - According to the new UPI rule, chargebacks will now be automatically accepted or rejected based on Transaction Credit Confirmation (TCC) and Return Requests (RET) raised by beneficiary banks in the subsequent settlement cycle after the chargeback has been initiated.

      - This new feature has been implemented in the UPI Dispute Resolution System (URCS) with effect from February 15, 2025.

      - A chargeback is a process that reverses a completed UPI transaction due to disputes, fraud, or technical errors. It is initiated by the payer's bank, and upon approval, the transaction amount is refunded to the payer.

Main Point :-   (i) Currently, remitting banks can initiate chargebacks from 'T+0' onwards in the UPI Dispute Resolution System (URCS), which doesn’t provide sufficient time for beneficiary banks to reconcile transactions, leading to rejected Return Requests (RET).

      (ii) In some instances, chargebacks are closed automatically with deemed acceptance, resulting in penalties imposed by the Reserve Bank of India (RBI).

(iii) The new UPI rule applies solely to bulk upload options and the Unified Dispute Resolution Interface (UDIR), excluding front-end dispute resolution options, and allows beneficiary banks to reconcile transactions more effectively before chargebacks are automatically deemed approved.
About NPCI

MD & CEO : Dilip Asbe
Headquarter : Mumbai
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