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National Automated Clearing House

About NACH :

  • NACH (National Automated Clearing House) is a funds clearing platform set up by NPCI (National Payments Corporation of India) similar to the existing ECS of RBI. NACH (Debit) & NACH (Credit) aims at facilitating interbank high volume, low value debit/credit transactions, which are repetitive in nature, electronically using the NPCI service.

The Variants Of NACH :

  • Primarily there are two variants of NACH – NACH Debit & NACH Credit.

NACH Credit :

  • NACH Credit is an electronic payment service used by an institution for affording credits to a large number of beneficiaries in their bank accounts for the payment of dividend, interest, salary, pension etc. by raising a single debit to the bank account of the User Institution (Corporate registered for NACH Services).

NACH Debit :

  • NACH (Debit) facilitates the Corporate for collection of telephone / electricity / water bills, cess / tax collections, loan instalment repayments, periodic investments in mutual funds, insurance premium etc., that are periodic or repetitive in nature and payable to the User Institution (Corporate registered for NACH Services) by large number of customers etc.

Key Features Of NACH Debit :
NACH Debit is a Mandate based debit service. Following are the key features of the NACH Debit:

  • Automated processing and exchange of mandate information electronically with well defined timelines for acknowledgement/confirmation.
  • Each mandate needs to be accepted/ authorized by the debtor bank before the User can initiate a transaction.
  • Each mandate is uniquely identified by Unique Mandate Reference Number (UMRN), which makes tracking of multiple mandate details easier for customers.

Benefits Of NACH :
For Consumers:

  • Timely payment of bills /instalments /premium without remembering the due dates.
  • Faster processing time and less manual intervention.

For Banks:

  • Less dependence on cheques and paper based transactions.
  • Faster processing time and less manual intervention.
  • Better service to customers and affiliate organizations.

For Corporate (User Institutions):

  • Better customer service.
  • Timely dispersal of salaries, dividends, collection of EMIs and clearance of bills.
  • Facilitates automatic credit of variable benefits like allowances, scholarships etc.
  • Less dependence on cheques and paper transactions.