The UPI dispute redressal mechanism is the fixed process NPCI has set for handling complaints about UPI payments. You raise the complaint inside your UPI app on the specific transaction. If it is not solved, it moves up to the bank behind the app, then your own bank, then NPCI, and finally the RBI Ombudsman.
It covers both fund transfers between people and payments to merchants. Underneath, banks settle disputes through chargebacks, with time limits for responses and refunds. This guide explains the five levels, the key terms, how a complaint actually travels, the timelines, the 2025 changes and the new RBI Ombudsman scheme that started on 1 July 2026. Other UPI guides are on the UPI guides hub.
Quick answer: the five levels of the UPI dispute redressal mechanism
| Level | Who handles it | Role |
|---|---|---|
| 1 | UPI app (TPAP or bank app) | Takes the complaint and shows status |
| 2 | PSP bank | The bank that runs UPI for that app |
| 3 | Your account-holding bank | The bank where your money sits |
| 4 | NPCI | Runs the UPI network |
| 5 | Banking Ombudsman / Ombudsman for Digital Transactions (RBI) | Independent redress if banks fail |
Who the mechanism applies to
Every UPI user, whichever app they use. NPCI’s page says a complaint is first raised with the relevant third-party app for customers onboarded through it, and that complaints can be raised for both fund transfers and merchant transactions. If you pay through your bank’s own app, the bank is both the app and the PSP, so levels 1 and 2 merge.
Key terms in the UPI dispute redressal mechanism
- TPAP: Third-party app provider, such as a payments app that is not a bank.
- PSP bank: Payment service provider bank that connects a TPAP to UPI.
- Remitter bank: The bank that sent the money (yours, when you pay).
- Beneficiary bank: The bank that received the money.
- Chargeback: A formal request from the remitter bank to the beneficiary bank to return money for a valid dispute.
- TAT: Turnaround time, the deadline to resolve a failed transaction.
- UTR: The 12-digit UPI reference number that identifies the payment. See UPI transaction ID.
How a complaint moves through the system
- You open the transaction in your app and raise a complaint.
- The app sends it, with the transaction details, through NPCI’s online dispute system to the banks involved.
- If the issue is a failed transaction, the remitter bank checks status and reverses the debit.
- If the money reached the beneficiary bank, your bank raises a chargeback to that bank.
- The beneficiary bank accepts or rejects it within the allowed time.
- The app updates your complaint status. If you are not satisfied, you escalate to the next level.
Example: a merchant payment dispute
You pay ₹18,000 to an online store for a phone that never arrives, and the store stops replying. You raise a dispute in your UPI app with the order ID. Your bank, as remitter, raises a chargeback to the store’s bank. Under NPCI’s July 2025 changes, as reported, the store’s bank has 15 days to respond on a merchant payment. If it accepts, or does not respond in time, the amount is credited back to you. If it rejects with proof of delivery, you can escalate to your bank’s grievance officer and then the Ombudsman.
UPI dispute redressal timelines you should know
| Rule | Timeline | Source |
|---|---|---|
| P2P failed debit reversal | T+1; ₹100/day after | RBI 2019 TAT circular |
| P2M failed payment refund | T+5; ₹100/day after | RBI 2019 TAT circular |
| Beneficiary bank response to P2P chargeback | 3 calendar days | NPCI change from 15 July 2025 (as reported) |
| Beneficiary bank response to P2M chargeback | 15 days | NPCI change from 15 July 2025 (as reported) |
| Go to RBI Ombudsman | After 30 days with no reply, or on rejection or an unsatisfactory reply | RB-IOS 2026 |
| Deadline to file with the Ombudsman | 90 days from the end of the bank’s response period or its last reply, whichever is later | RB-IOS 2026 |
In the RBI TAT circular, T is the calendar date of the transaction, so weekends count. For more on failed payments, see UPI transaction failed.
Recent changes to UPI disputes
Deemed acceptance
If the beneficiary bank does not respond to a chargeback within its window, the claim is treated as accepted and the refund goes through. This was meant to stop disputes from sitting idle.
Good-faith re-raise
From 15 July 2025, a remitter bank can re-raise a valid chargeback that the system had auto-rejected because of earlier disputes on the same account, without asking NPCI for special approval first.
Caps on disputes
From August 2025, reports state each user can raise up to 10 chargeback requests in 30 days, with 5 linked to the same counterparty. Exact handling may vary by bank/app; check in your app.
End of person-to-person collect requests
NPCI stopped person-to-person collect requests from 1 October 2025, to cut a common source of fraud disputes. Person-to-person payments are now started by the payer.
Escalating to the RBI Ombudsman under the 2026 scheme
The Reserve Bank – Integrated Ombudsman Scheme, 2026 took effect on 1 July 2026 and replaced the 2021 scheme. How to use it for a UPI dispute:
- Make sure you complained to your bank in writing first and kept the number.
- Wait 30 days, or use the bank’s rejection letter if it came earlier.
- File within 90 days at cms.rbi.org.in, by email to crpc@rbi.org.in, or by post to the Centralised Receipt and Processing Centre in Chandigarh, with transaction details and complaint history.
- Track the case online. There is no fee.
| Point | RB-IOS 2021 | RB-IOS 2026 |
|---|---|---|
| Time to file after bank’s reply | One year | 90 days |
| Award for consequential loss | Up to ₹20 lakh | Up to ₹30 lakh |
| Award for harassment, expenses | Up to ₹1 lakh | Up to ₹3 lakh |
| Fee | None | None |
Common mistakes in UPI disputes
- Skipping levels and writing straight to NPCI or RBI; you will usually be sent back to the app or bank.
- Raising disputes for small or duplicate issues and hitting the monthly cap.
- Not keeping the closure message when a complaint is closed without a fix; you need it to escalate.
- Missing the 90-day Ombudsman window under the 2026 scheme.
Common problems and fixes
- Complaint closed without action: escalate to the next level with the closure message.
- App says contact bank: do it, and quote the app ticket number.
- Fraud cases: the mechanism alone is not enough. Call 1930 too. See our UPI fraud complaint guide.
- Wrong transfer: a chargeback is not the right tool; the receiver’s consent is needed. See how to reverse a UPI transaction.
FAQs on the UPI dispute redressal mechanism
Can I skip the app and go straight to NPCI?
NPCI’s process expects you to start with the app and banks. Going straight to NPCI usually leads to being redirected.
Does it cover merchant payments?
Yes. NPCI lists fund transfers and merchant transactions as covered.
Is there any charge?
No. Complaints at every level, including the RBI Ombudsman, are free.
How do I track my complaint?
In the same app where you raised it. The app is required to show status updates.
What is a chargeback in UPI?
A formal request from your bank to the receiving bank to return money for a valid dispute, such as a failed or undelivered merchant payment.
What happens if the receiving bank ignores a chargeback?
Under the 2025 changes, as reported, a chargeback not answered within the window is treated as accepted and the refund goes through.
Conclusion
The UPI dispute redressal mechanism works best when you follow it in order and keep records. Start in the app, escalate one level at a time, and use the RBI Ombudsman as the final step within 90 days. Related: UPI refund complaint and the UPI guides hub.
Sources: NPCI UPI dispute redressal mechanism; RBI TAT circular (2019); Outlook Money on 2025 chargeback rules; The Week on end of P2P collect; Salient features of RB-IOS 2026 (Canara Bank); Vinod Kothari on RB-IOS 2026 changes; RBI CMS.
This guide is for general information only. Limits and features can change; check your bank or UPI app for the latest details. FIIAndDIIData.com is not affiliated with NPCI or any UPI app.
