Credit Card Chargeback in India: Evidence, Dispute

“Chargeback” is often used loosely for any card refund dispute, but three layers should be separated: the merchant refund contract, the issuer/card-network dispute process, and RBI’s customer-protection rules for unauthorised electronic transactions. RBI rules can cap customer liability for unauthorised transactions based on the cause and reporting delay, while an ordinary quality/non-delivery merchant dispute still depends on issuer/network evidence and timelines.

Current rule and what decides the result

A card 'chargeback' can mean different things. Separate (1) an authorised purchase where goods/services were not delivered or refund was not processed, (2) an unauthorised electronic transaction governed by RBI customer-liability rules, and (3) the bank/network's contractual dispute process. For qualifying third-party unauthorised transactions where neither bank nor customer is at fault, reporting within three working days can lead to zero customer liability; four-to-seven working days can mean limited liability under the RBI table. If the bank's grievance handling remains unsatisfactory, the Reserve Bank Integrated Ombudsman Scheme, 2026—effective 1 July 2026—provides the regulatory escalation route after the required complaint stage.

Key rules to apply

If the bank’s grievance handling fails, the Reserve Bank Integrated Ombudsman Scheme, 2026 provides an escalation route after the prescribed bank-complaint stage.
Unauthorised versus merchant dispute: Fraud/unauthorised use is governed by customer-liability rules; a cardholder who authorised payment but disputes non-delivery or cancellation is in a different evidentiary category.
For qualifying third-party unauthorised transactions where neither bank nor customer is at fault, reporting within three working days can result in zero customer liability under RBI rules.
4–7 day window: Reporting within four to seven working days can produce limited liability under the RBI table, depending on card/account category and facts.
Where loss arises from customer negligence such as sharing credentials, liability can remain with the customer until the unauthorised transaction is reported; later loss is treated under the rule.
Merchant correspondence, cancellation terms, delivery proof, transaction ID and date promised are central to issuer/network dispute processing; a chargeback is not guaranteed merely because the cardholder is unhappy.

Unauthorised card transaction reported next day

A cardholder sees a ₹42,000 online card transaction she did not authorise and reports it to the issuer the next working day. If the facts fit the third-party breach category and there is no customer negligence, the RBI zero-liability window is engaged. The bank should also provide the required provisional/shadow reversal within the regulatory timeline while investigating, rather than forcing the customer to fund the disputed amount indefinitely.

Authorised purchase but merchant never delivers

A cardholder knowingly pays ₹65,000 for an appliance, but the merchant neither delivers nor refunds after cancellation. This is not automatically an 'unauthorised transaction' case. The cardholder should use the issuer/network merchant-dispute/chargeback process with order confirmation, cancellation, promised delivery date and merchant correspondence. If the bank mishandles the complaint, RBI grievance/Ombudsman escalation can be relevant, but the evidentiary theory differs from fraud.

How to apply it step by step

Immediately classify the dispute: unauthorised use, duplicate/processing error or authorised merchant-performance dispute.
Block/freeze the card where fraud is suspected and notify the issuer through a recorded channel.
Save SMS/app alerts, transaction ID, merchant invoice/order and all correspondence.
For merchant disputes, submit cancellation/non-delivery/refund evidence within the issuer/network time limit.
For unauthorised transactions, record exact discovery/reporting time because RBI liability windows are time-sensitive.
Track provisional/shadow reversal and investigation outcome in account statements.
Escalate to the bank’s grievance/nodal officer if the first response is inadequate.
After the bank-complaint stage, use RBI CMS/Integrated Ombudsman Scheme 2026 where eligible and preserve the complaint trail.

Common mistakes and edge cases

Calling every merchant disagreement “fraud”.
Waiting weeks to report an unauthorised transaction.
Deleting merchant chats after filing a dispute.
Assuming a chargeback is guaranteed rather than evidence-based.
Approaching the Ombudsman without first completing the bank complaint stage where required.

FAQs

What is the RBI zero-liability reporting window?

What happens at four to seven working days?

Liability can be limited under the RBI table depending on the card/account category and facts.

Is non-delivery an unauthorised transaction?

Not if you authorised the payment; it is usually a merchant-performance dispute with different evidence.

What evidence helps a chargeback?

Order/transaction details, cancellation/refund promise, delivery evidence and merchant correspondence.

When can I use the RBI Ombudsman route?

After using the bank’s complaint mechanism and meeting the eligibility/timing conditions under RB-IOS 2026.

When did RB-IOS 2026 take effect?

The Reserve Bank Integrated Ombudsman Scheme, 2026 took effect on 1 July 2026.

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Primary sources

Educational information only. Tax, legal, banking, investment and insurance outcomes depend on facts, dates and the instrument or policy in force. Obtain professional advice for material transactions.