Why do banks take so long to refund, yet debit the money instantly for a transaction?

[Lordkk]

I have read on quora that it's because banks what to keep the money with them as long as possible to earn interest. Is it true?

If debit is instant then credit should be instant too. For HDFC when I cancel a transaction I get a message that the transaction has been reversed but actual money come after few days.

Bank may say that its how tech works but It's hard to believe that they are telling 100% truth.

 

[Deleted member 27665]

Yeh mujhe bhi jaanana hai.... Kal hi yeh haadsa ho gaya mere saath 🥲

 

[Vasuki]

Because it takes 2-3 days ( working for money to actually get transferred into their account)

If u do debit card transaction & money is debited but the company or even in upi 3rd person company/ banks get it after 2-3 days.

What we see is only front end ..
Back end transaction settlement takes time .


Untill company receives it how they gonna refund

 

[Deleted member 27665]

Because it takes 2-3 days ( working for money to actually get transferred into their account)

If u do debit card transaction & money is debited but the company or even in upi 3rd person company/ banks get it after 2-3 days.

What we see is only front end ..
Back end transaction settlement takes time .


Untill company receives it how they gonna refund

Koi technology aani chahiye ki failed transaction hone par apne paison ko waapas kheech kar bank account mein daal dein

 

[Lordkk]

Because it takes 2-3 days ( working for money to actually get transferred into their account)

If u do debit card transaction & money is debited but the company or even in upi 3rd person company/ banks get it after 2-3 days.

What we see is only front end ..
Back end transaction settlement takes time .


Untill company receives it how they gonna refund

No Sir As far as I know the UPI transactions are instant as they are based on IMPS. Still banks take mostly 3 days to refund the UPI transaction.

 

[Lordkk]

Koi technology aani chahiye ki failed transaction hone par apne paison ko waapas kheech kar bank account mein daal dein

Yes you are right.

Yes if debit is instant then credit should be instant too. For HDFC when I cancel a transaction I get a message that the transaction has been reversed but actual money come after few days.

Bank may say that its how tech works but It's yet hard to believe that they are telling 100% truth.

 

[Vasuki]

Koi technology aani chahiye ki failed transaction hone par apne paison ko waapas kheech kar bank account mein daal dein

No Sir As far as I know the UPI transactions are instant as they are based on IMPS. Still banks take mostly 3 days to refund the UPI transaction.

Bro what we see debit & credit in phone is just reflection that u have it .

But bank to bank transaction occur in a conglomeration of all debit & credit form bank to bank ..
It takes 1-2 days .

Yes upi is different system but Bank to bank transaction doesn't uses UpI 😂 come on its users who uses UPI & ImPs and what not


We use Top cake of Product .. what does deep in banking system is very different vis-ve transaction is concerned

 

[Deleted member 27665]

Bro what we see debit & credit in phone is just reflection that u have it .

But bank to bank transaction occur in a conglomeration of all debit & credit form bank to bank ..
It takes 1-2 days .

Yes upi is different system but Bank to bank transaction doesn't uses UpI 😂 come on its users who uses UPI & ImPs and what not


We use Top cake of Product .. what does deep in banking system is very different vis-ve transaction is concerned

We want to see front end credit for refund too Backend se bhale hi 1 month lele bank refund dene mein

 

[Vasuki]

We want to see front end credit for refund too

Untill bank recives how they gonna give refund..
It is also the reason post 48 hr of transaction u can dispute it & get it solved easily bcz that transaction amount in booked on to another Bank but in distupte hence your bank doesn't receive the fund ..

 

[its_karan]

I have read on quora that it's because banks what to keep the money with them as long as possible to earn interest. Is it true?

Yes

It's called Float Income.

It has many repercussions.

Each day generates surplus income.

You have to keep in mind that this is excess income and in volumes, this generates a sizable surplus.

This is the reason banks do not lose on UPI, as they generate too much float income on the CASA even after loss of MDR.

 

[Lordkk]

It's called Float Income.

It has many repercussions.

Each day generates surplus income.

You have to keep in mind that this is excess income and in volumes, this generates a sizable surplus.

This is the reason banks do not lose on UPI, as they generate too much float income on the CASA.

Wow, so they are earning from our money. Thanks for the podcast link.

Do you have any idea if they do it on purpose to generate extra income or it's just the way the system work?

 

[its_karan]

Wow, so they are earning from our money. Thanks for the podcast link.

Do you have any idea if they do it on purpose to generate extra income or it's just the way the system work?

It works like that

 

[CosmicCat]

I have read on quora that it's because banks what to keep the money with them as long as possible to earn interest. Is it true?

If debit is instant then credit should be instant too. For HDFC when I cancel a transaction I get a message that the transaction has been reversed but actual money come after few days.

Bank may say that its how tech works but It's hard to believe that they are telling 100% truth.

Not entirely true. There are a lot of stuff going behind the scenes. Razorpay has an interesting article written on this. Go through it:

Refunds Guide: How Do Refunds Work & Why Do Refunds Take Time?

Discover why refunds take time. Explore our guide on the Razorpay blog to understand the factors affecting refund timelines and processing delays.

razorpay.com

 

[theglobalinvestor]

Because it takes 2-3 days ( working for money to actually get transferred into their account)

If u do debit card transaction & money is debited but the company or even in upi 3rd person company/ banks get it after 2-3 days.

What we see is only front end ..
Back end transaction settlement takes time .


Untill company receives it how they gonna refund

I guess these banks still haven't heard of UPI which has real time settlement?

 

[Vasuki]

I guess these banks still haven't heard of UPI which has real time settlement?

Bank to bank doesnt do upi transfer..
Customer do upi transfer..

 

[techt]

Yes

It's called Float Income.

It has many repercussions.

Each day generates surplus income.

You have to keep in mind that this is excess income and in volumes, this generates a sizable surplus.

This is the reason banks do not lose on UPI, as they generate too much float income on the CASA even after loss of MDR.

wow ... excellent explanation.
You are CA Karan Batra. Till now I mistook your username for CANARA BANK and was wondering, I have seen fans of CCs but a fan of bank? That too Canara ? May be a Canara Bank employee.

 

[techt]

It works like that

So Banks are the institute version of Arindam ?

 

[CosmicCat]

wow ... excellent explanation.
You are CA Karan Batra. Till now I mistook your username for CANARA BANK and was wondering, I have seen fans of CCs but a fan of bank? That too Canara ? May be Canara Bank employee.

And I've mostly read it as "Caka Ranbatra." 🤣

 

[its_karan]

Till now I mistook your username for CANARA BANK and was wondering, I have seen fans of CCs but a fan of bank? That too Canara ? May be a Canara Bank employee.

 

[techt]

Bank to bank does do upi transfer..
Customer do upi transfer..

And point being ?