Glad you found the regulation regarding this.
I had (dare I say…) assumed this was the case but the way Monzo are doing things is at serious detriment to the consumer.
wouldn’t that depend on what type of chargeback you are claiming, if its on the first or second presentation , from an ATM , or a services not as described chargeback , a single message system or a dual message system, before or after 16 July 2020 , to which clause / rule / timeframe actually applies of the 733 pages of rules ?
Not sure its quite as easy as Monzo is in the wrong because they dont immediately give you your money back when they could be entirely differing cases of chargebacks and the reasons for the chargeback
the actual clause @admdly found was arguably concerning retaining funds twice for the same transaction
** The issuer, acquirer, merchant, or cardholder must not retain funds, goods, and/or services twice for the same transaction. Issuers and acquirers are responsible to research and identify refunds prior to each chargeback processing cycle. Issues of this nature must be resolved properly during the chargeback and second presentment cycles and within the required timeframes. A compliance case filing is invalid. Examples include but are not limited to:*
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- – When an issuer has billed a transaction to its cardholder’s account for payment and then chooses to exercise a chargeback right, the issuer must credit the cardholder’s account for the amount of the chargeback. An issuer must not allow a cardholder to be credited twice because of a chargeback processed by the issuer and a refund processed by the merchant.*
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- – When a cardholder is credited twice (once by the issuer as a result of a chargeback and again through a refund processed by the merchant), the acquirer must process a timely second presentment which identified a refund was previously processed. A compliance*
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I agree that the example provided in the guide appears to concern refunding twice, but it is mentioned under the Rights and Obligations section and is but one example. Notably, the Visa dispute process states that the funds must be returned to the bank within 1 day or Visa will actually carry out the return of funds.
Neither appear to specifically mandate that the customer receive the funds immediately, nor would I expect them to do so as these agreements are between members of MasterCard/Visa. I have no doubt that Monzo are complying with any requirements, as it would be foolish of them to do otherwise in a highly regulated environment.
That said, there does appear to be a difference between Monzo and other established banks according to reported experiences. It would be interesting to compare how each other bank handles it to compare, but I doubt there is a comprehensive resource covering this.
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Entirely agree regarding the mastercard process , all it says is
"the issuer must credit the cardholder’s account for the amount of the chargeback "
which I think goes without saying if the chargeback is warranted and successful
anyway off topic …sorry
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I guess that this is just making it clear that banks can’t monetize the chargeback process by taking a cut of the returned funds. 
I think this post from @thomas explains why Monzo choose not to refund up front - Mastercard chargeback taking more than 3 months - #23 by thomas
If we think about it in the context of legacy banks, and how everything is about monitizing a customer through fees and charges, why would they care if you ended up overdrawn if the charge was represented? Personally, I wouldn’t want the mental note of “that money isn’t yet safe”, I’d just prefer to know it’s spendable.
Maybe I have a different view on how easy chargebacks should be, given how frustrating it is as a merchant to have to handle unreasonable chargebacks from customers who use it as a mechanism for cancelling/because of buyer’s regret, but justify it to banks as some kind of breach of contract.
Edit: to add some examples, the last two chargebacks I handled were for less than £10. We won both cases, but the customer never contacted us outside of the chargeback process to cancel (which is really what they wanted). I can only presume they were refunded up front and their bank absorbed the cost. That isn’t a sustainable ecosystem.
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