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A debit appears in the bank statement that nobody in the business recognises, so the cash book and passbook do not agree.
Read the narration for the channel and payee, check the date pattern and amount against charges schedules, mandates, loan schedules, card statements and tax challans, and report anything still unexplained and unauthorised to the bank.
A list of active mandates and standing instructions, the bank's schedule of charges, loan and insurance schedules, card statements and paid challans, plus a suspense line with owner and date.
Each unknown debit is booked to its correct ledger, reported to the bank as unauthorised, or parked in suspense with an owner and a deadline.
Most debits you do not recognise are ordinary: bank charges with GST added, auto-debits (EMIs, insurance premiums, SIPs, UPI AutoPay or NACH mandates), card or ATM use, or tax payments made from the account. A genuine unauthorised debit is the rarest cause. But if you suspect one, report it to your bank the same day.
What are the usual causes and where do you confirm them?
Start with the narration, the text the bank prints next to the amount. It usually names the channel and sometimes the payee. Our guide on decoding narration codes explains each prefix.
| Narration clue | Likely cause | Where to confirm | Entry in the books |
|---|---|---|---|
| CHGS, SMS CHG, AMC, odd amount like ₹590 | Bank charges plus 18 percent GST | The bank’s schedule of charges | Bank charges and GST input |
| NACH, ACH, ECS with a company name | Loan EMI, insurance, SIP mandate | Mandate list in net banking, loan schedule | Loan, insurance or investment ledger |
| UPI AutoPay or a merchant name repeating monthly | Subscription or recurring UPI mandate | Mandates section in the UPI app | Expense ledger for that service |
| POS, ATM, card number ending | Card or ATM use | Debit card records, staff who hold cards | Relevant expense or cash |
| CBDT, TAX, GST, challan number | TDS, advance tax or GST payment | Paid challans on the tax portals | Tax payable or tax asset ledger |
| INT or interest on an OD or CC account | Interest charged | Loan sanction letter, interest statement | Interest expense |
How do you tell an unauthorised debit from an auto-debit you forgot?
Ask three questions. Is there a mandate or standing instruction you set up, even years ago? Does the amount repeat on a similar date each month? Is the payee a company you have dealt with? If all three answers are no, treat it as possibly unauthorised.
Call the bank, block the card or channel if needed, and follow up in writing. RBI rules limit a customer’s liability for unauthorised electronic transactions, and how much protection you get depends on how quickly you report. If the bank does not resolve your complaint, you can escalate through the RBI complaint system. For a mandate debit you never signed, ask the bank for the mandate details and the name of the company that registered it.
Worked example
Every month a debit of ₹1,180 appears, narrated only as “CHGS”. The owner does not know what it is.
The bank’s schedule of charges shows a monthly account maintenance charge of ₹1,000 for this type of current account. GST at 18 percent on ₹1,000 is ₹180. ₹1,000 plus ₹180 equals ₹1,180.
So the entry each month is:
- Bank charges: ₹1,000 (debit)
- GST input credit: ₹180 (debit), if the bank’s GST invoice shows your GSTIN
- Bank account: ₹1,180 (credit)
Once these entries are passed, the cash book matches the passbook for that line.
What if you still cannot identify it after a week?
Do not hide it inside bank charges or a general expense. Book it to a suspense account, and write down three things next to it: who owns finding the answer, the date by which they must report back, and what has been checked so far.
Then ask the bank for the full transaction details. Banks can usually tell you the beneficiary account and channel for any debit. A suspense line with an owner and a date gets cleared. One with neither sits there for years.
What mistakes should you avoid?
- Booking every unknown debit to bank charges just to close the month. It hides fraud and wrong charges alike.
- Forgetting the GST part of a charge. If the bank’s invoice shows your GSTIN, the GST may be claimable as input credit.
- Ignoring a small repeating debit. A forgotten subscription of a few hundred rupees a month adds up to thousands a year.
- Waiting to report a suspicious debit until the next month’s reconciliation. Report it the day you notice it.
What does RBI say about failed transfers?
Some unknown debits are failed transactions that have not yet been reversed. The RBI circular of 20 September 2019 on turnaround time for failed transactions (in force from 15 October 2019) sets outer limits. If your account is debited for a UPI or IMPS transfer that never reaches the beneficiary, the beneficiary’s bank must reverse it by T+1, one day after the transaction date. For ATM cash not dispensed, the limit is T+5. For every day of delay beyond the limit the bank owes ₹100 per day, credited automatically without a complaint. If you see an ATM withdrawal where no cash came out, or a UPI debit for a payment the other side never received, note the transaction date and count the days. Compensation for a late reversal arrives as a separate credit, which you book as other income.
What to read next
Next, learn to decode bank statement narration codes and match each to a book entry. For the common cases, read bank charges reconciliation in India and bank statement narration patterns. For the receipts side, see credits you cannot match.
When many unknown lines pile up each month, TransactIG matches bank statement lines to your books and keeps the unmatched ones in an exception queue with an audit trail; see bank reconciliation software for India.