NPCI Revises IMPS Chargeback Handling Process

National Payments Corporation of India (NPCI), through Circular No. 127/2025-26 dated 10 July 2025, announced changes to the IMPS dispute resolution process concerning chargebacks. Currently, remitting banks can raise chargebacks from T+0 for transactions above ₹25,000, often before beneficiary banks can process returns (RET) or Transaction Correction Claims (TCC), leading to automatic rejection of such records and potential deemed acceptance of chargebacks along with penalties. To address this issue, NPCI will implement an auto acceptance/rejection mechanism based on TCC/RET entries raised by beneficiary banks in the settlement cycle following a chargeback. This updated process will be applicable only for transactions using bulk upload or ODIR (Offline Dispute Initiation & Response) methods and not for front-end interfaces.

Key points include: auto acceptance applies only to deemed approved peer-to-peer (P2P) chargebacks, not to deferred ones; it is limited to bulk upload/ODIR submissions of RET and TCC (codes 102/103); and the existing dispute resolution rules, including turnaround time (TAT), remain unchanged. The system will automatically accept or re-present chargebacks if RET/TCC is raised in the next settlement cycle, with specific new dispute flags (e.g., “IA”) and reason codes (e.g., 9886, 9887) applied by the IRCS. Member banks are advised to ensure timely and accurate TCC submissions to avoid unnecessary escalation to arbitration. The new functionality will be effective from August 27, 2025.

NPCD
NATIONAL PAYMENTS CORPORATION OP INDIA

NPCl/ IIVIPS/OC No. 127/2025 -2026|Dated: Jul 10, 2025    

To,

All Members of Immediate Payment service (IMPS)

Subject: Auto acceptance & rejection of chargeback basis the TCC & Returns

Chargebacks are often initiated by remitting banks before beneficiary banks can act on IMPS deemed approved transactions. The current process allows remitting banks to raise chargeback from T+0 onwards for above 25,000 Rs transaction in IMPS IRCS system, due to which beneficiary banks are not getting sufficient time to reconcile and process returns (RET/TCC) proactively before a dispute is taking shape of chargeback. Currently in such cases where charge back is already raised the TCC/RET records are rejected by the system, if the banks do not handle such rejections the chargeback will get deemed accepted along with RBI penalty.

To address these challenges and improve the efficiency of dispute resolution, we are implementing auto acceptance/rejection of chargeback basis the TCC/RET raised by the beneficiary bank in next settlement cycle after the chargeback is already raised. Note, this revised process is applicable only for bulk upload option & ODIR not in front end option.

Key Points: –

• Auto acceptance of the chargebacks is applicable only for deemed approved P2P chargeback not applicable for Deferred chargebacks.
• Auto acceptance/Re-presentment is applicable for bulk upload and ODIR based RET & TCC (10²/₁03) only.
• Not Applicable for front end option, because if chargeback is already raised then IRCS will show the chargeback accept/Reject option to beneficiary bank, not the RET & TCC (102/103).
• Other than above mentioned points there are no changes in any of the dispute rules/process such as TAT, penalties, compensation, cutovers, settlement, fees, GST, reports/files etc.
• Member banks should ensure to raise correct TCC (102/103) to avoid moving the chargebacks life cycle to pre-arbitration/arbitration.
• TAT for all disputes viz. raise Chargeback, TCC, RET is 45 days, thus, auto acceptance/rejection also follows the same TAT.

Note: Refer Annexure-1 for rules and process set for auto acceptance/rejection of the chargeback. The above functionality will be implemented in IRCS with effect from Aug 27, 2025.

Member banks are advised to take a note of the above and disseminate the information contained herein to the officials concerned.

Warm Regards,

SD/-
Giridhar GM
Chief — Customer Success

NPCI
NATIONAL PAYMENTS CORPORATION OF INDIA

Annexure-1

Refer below the table for rules and process set for auto acceptance/rejection of the chargeback.