Have you ever imagined what will happen if you by mistake transfer money to a wrong bank account? Will you be able to get it back? Does the bank have the power to reverse the transaction? Well, banks cannot reverse it, unless they have an approval from the beneficiary. It is, therefore, important to be very alert while transferring money to a bank account.
One wrong transaction can make you run from pillar to post. Adhil Shetty, CEO & co-founder, Bankbazaar.com, says, "The most important thing to understand is that if a transaction has been made, the bank cannot reverse it from its end without approval from the beneficiary. Bank can only act as a facilitator."
According to Reserve Bank of India (RBI) rules, it's the responsibility of the remitter to provide the correct beneficiary account number and other details while doing payment. There is no mandatory rule by the RBI that banks have to check each and everything. It's remitters responsibility to check the number twice and thrice . Ashutosh Khajuria, Executive Director, Federal Bank, says, "If there is a fraud in the payment, then it is null and void. But in the normal payment channel, if transfer is affected and the credit has been made, it is not easy to get back the money, unless the receiver agrees to return it back".
Here is a primer to help you understand what to do if you accidentally send money to a wrong bank account.
Reasons which results wrong transactions:
Time for quick action:
- Due to human (typing a wrong account number) or technical errors
- Human errors due to discrepancies in the account number, IFSC code or both
- Technical glitches at the bank's end can also cause the error
What if the wrong beneficiary refuses to give the money back?
- Try to inform the bank and bank manager immediately after the wrong transaction
- Money will get back to your account automatically, if the account number you mentioned does not exists but in case the situation is opposite, you have to take immediate action
- You have to prove the bank in details that you transferred the money to a wrong beneficiary's account
- If the money is credited to the account of an unintended beneficiary with the same name as your intended beneficiary, then in that case you have to prove that the transfer itself was wrong before the bank can help. But it's not that easy
- Try to mail the matter in detail to the bank for the sake of better communication
- Bank can only act as a facilitator by providing you the contact number/branch name of the unintended beneficiary
- Try to follow up the situation regularly because at the end it's your hard-earned money
- In case the transfer intra-bank, the bank may approach the recipient on your behalf and request a reversal of transaction. If the beneficiary agrees, the transaction will be reversed within one working week
- If the beneficiary is of other bank and you transferred amount by mistake, then you have to go personally to that particular branch and meet the bank manager to get the solution done.
Rules to follow:
- You cannot take the money back without the wrong beneficiary's consent. The beneficiary has to accept that the wrong transaction is made but it's not that easy
- In that case, contact your bank and update the matter clearly
- To keep a record of your complain; always try to mail the matter in details for better communication
- If he or she refuses to give your money back then you can do a legal case as well but the situation becomes more complicated if your bank and your beneficiary's banks are different, and/or are in different cities
- Taking legal route is time consuming which involves too many formalities which includes lawyer's fees etc
- If a beneficiary is okay giving your money back then it takes 8-10 working days to get your money back. Otherwise, you have to prove the transaction with the help of right statement, address and ID proof etc.
- No recovery is possible is the beneficiary contests the reversal and refuses approval
- According to the RBI guidelines, it is the responsibility of the depositor to provide the correct account number and IFSC code
- There is no rule that the banks will verify all the details
- Before transferring the money, always check twice or thrice the account number and the IFSC code
- It is always advisable to transfer a small amount of money. Like Rs.100, as a test to verify that the amount is transferred to the right beneficiary
- Try to double check the digits after typing and for online payment test transfer is the safest mode
- Try to complain immediately to the concern bank for wrong transaction and reply the bank as quick as possible. At the end it's your hard-earned money, so be cautious when you transfer the money.