Recently booked about 5 tickets on Air Pegasus and 24hrs prior to the flight got the dreaded call saying that they were cancelling the flight and hence offering to put us onto another service of theirs or we could take a full refund.

We opted for the full refund which they said they were processing right away. Tickets were booked via Cleartrip and so they said it should reflect in a few days time.

Fast forward a week and no refund in sight and so called in cleartrip and then was told i should cancel with cleartrip as well in order to start the refund process. This was subsequently done and then they say 500 bucks is charged per passenger for this refund as some sort of payment gateway charges. So bringing it to 2500 bucks in all.

So the airline is willing to refund you fully, Cleartrip also is willing to refund fully also and strangely not take any of of their 'convenience fees', but the bank needs to be paid for this...??? Found this a little strange...!!!

Same thing happened to me with makemytrip and air Costa. I had to separately ask makemytrip to refund the convenience fee, they obliged and apologized and said the system should have refunded the fee as well but didn't due to a technical glitch. Right.. How umm convenient

I have never heard of Bank charging anything. Who said this?
From your post, what I am getting is that Cleartrip deducted 500 Rs per passenger with some lame 'Payment Gateway Charges' excuse.

just another in a long list of reasons i don't book through an ota....

OTOH, I have recently been booking all tickets / hotels through OTA's coz of HDFC Diners club 10x offer.

This said I totally agree with you, if not for the 10x, I would never book with OTA.