Ever transferred money through UPI and realised—too late—that it went to the wrong person? That sinking feeling is all too familiar. If anyone ever had to file a UPI chargeback to reverse a UPI transaction, know this: while NPCI has had systems in place to fix such errors, the process often felt slow and frustrating.
But what if your bank could fix the error on the spot—no waiting, no approvals? There’s good news: the new rule from NPCI might just make UPI chargeback a lot smoother and faster for people like you.
Let’s take a deeper look at UPI chargeback, what the NPCI update of July 2025 is, how it affects you, and how to utilise the redressal mechanism in case you made this mistake.
| According to the latest update from NPCI, starting July 15, 2025, banks can directly process refunds for UPI transactions sent to the wrong account or UPI ID—no need to wait for NPCI approval. This means faster resolutions for genuine mistakes, making it easier for users to get their UPI transactions reversed quickly and securely. |
First, What Is a UPI Chargeback?
A UPI chargeback is essentially the reversal of a UPI transaction that has already been completed, usually because of a problem or dispute with it.
If something goes wrong or if you accidentally
⇒ Send money to the wrong UPI ID or VPA (Virtual Payment Address)
⇒ Enter the wrong bank account number or IFSC code
⇒ Get charged twice for the same transaction
You can file a UPI dispute for a reverse transaction by ‘charging back’ the transaction.
Earlier, banks had to involve NPCI (National Payments Corporation of India), the UPI authority, to approve or ‘whitelist’ certain cases. The process took time.
Now, NPCI is giving banks more power to fix things directly in these specific cases.
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What Is The Latest Change?
As of July 15, 2025, NPCI has introduced a major update in this scenario: the introduction of RGNB (Remitter Good Faith Negative Bounce or Remitting Bank Raising Good Faith Negative Chargeback).
However, it is only effective when URCS (UPI Dispute Resolution Mechanism) declines the normal chargeback due to:
• Reason code CD1: Money sent to the wrong account because of an incorrect bank account number or IFSC.
• Reason code CD2: Money sent to the wrong person because of a wrongly entered UPI ID (VPA).
Also Read: Top UPI Apps in India
RGNB in Simple Terms
RGNB is a new internal route banks can use when:
⇒ The sender made a genuine mistake, and the money went to the wrong person.
⇒ The bank has verified it was a real error, not a scam.
Essentially, NPCI allows banks to use RGNB only if they are highly sure the case is a genuine customer dispute.
Using RGNB, banks can directly refund or process the claim without needing NPCI’s prior permission, which was a mandatory step before.
However, NPCI also warns them of certain things:
⇒ Don’t misuse this system just to avoid penalties or skip the proper process.
⇒ Use RGNB only for genuine, well-verified errors.
If banks were found misusing it, they would be subject to penalisation.
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What Does This Mean for You as a UPI User?
If you’re a UPI user:
- Getting a reverse UPI transaction for genuine errors will now be faster.
- Your bank can resolve your issue without waiting for higher authority approval.
- Fewer delays, especially in simple cases of wrong transfers.
For banks and PSPs:
- Faster handling of customer complaints.
- More accountability to resolve small disputes without escalation.
- Reduced backlog at NPCI.
If you find the update too hard to understand with all its technical words, let’s have a hypothetical case to make it easier:
| Rahul was in a hurry for a meeting and had to send the money to his friend Komal. However, in a hurry, he made the mistake of misspelling the name as Kamal, and he sent the money to the wrong account. As he didn’t know who Kamal was, there was no way to contact this person.
In such a situation, the case can proceed in one of two ways: ♦ First Stop—Bank/UPI App: Rahul should immediately go to his UPI app (like Google Pay, PhonePe, or his bank’s app) or contact his bank’s customer care. He’ll need his transaction ID and details. He can initiate a correction request through their app, stating that the money was ‘incorrectly transferred to another account.’ ♦ The Initial Hope: If the recipient (Kamal) is cooperative and the money hasn’t been withdrawn, the banks can facilitate the reversal. Rahul could expect the refund within 3 to 7 working days if the process goes smoothly and the other party agrees, or if the money is still in the account. However, sometimes it’s not that simple. What if Kamal’s bank account was quickly emptied, or what if Kamal simply refused to return the money? In some cases, after multiple attempts, the system can automatically reject his dispute after a certain number of attempts. Now this is where the old system bites its own tail. But now, with the new ‘RGNB’ (Good Faith Negative Chargeback) process (from July 15, 2025):
This new rule makes fixing genuine UPI errors faster and simpler for banks, leading to quicker refunds for customers. |
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Here is How to Raise a Dispute for a Wrong UPI Transaction
It is fairly easy to request a reversal if you have had a wrong UPI transaction and are unable to do anything about it.
To raise a UPI dispute:
- Through Your UPI App: Go to your transaction history, select the transaction, and choose ‘Raise Concern’ or ‘Report Issue’.
- Through Your Bank: Call customer care, use their website/app’s dispute section, or visit a branch.
- Via NPCI Website: Visit npci.org.in, navigate to UPI > Dispute Redressal, and fill out the form.
Suggested Read: Set UPI PIN without Debit Card
You Know ‘What To Do’… But ‘What NOT To Do’?
You did an accidental UPI transfer. Do you know what you should not do?
- Don’t send repeated payment requests.
Most strangers won’t respond, and some may even block you. It rarely works and doesn’t count as formal action.
- Don’t delay raising a dispute.
The faster you act, the higher your chances of a successful reversal. - Don’t rely on social media or public complaints first.
Always go through your bank or UPI app’s official support channels. These are traceable and help the process move legally and smoothly. - Don’t share sensitive banking info while seeking help.
Even if someone claims to help you get your money back, never share your UPI PIN, OTPs, or login details.
Sticking to the right process protects both your money and your identity.
In Conclusion
Sending money to the wrong UPI ID used to mean stress and delays. But with NPCI’s new rules, banks can now act faster and fix genuine errors without extra approvals. It’s a big step toward simpler and safer digital payments.
Quick tip—always act fast, raise a dispute early, and stay alert. And if you’re tracking your financial health, using a credit score checker to track your score is a good way to maintain control over your finances. It pays to stay informed.
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