ECS (Electronic Clearing Service) Mandate Charges

ECS Mandate Meaning

ECS Mandate Meaning – Electronic Clearing Service or ECS was introduced by RBI to allow banks and financial institutions to debit loan EMIs automatically from the customers’ account. The entire process was built on a mandate commonly known as ECS mandate that gives the clearing house, in this case NACH or National Automated Clearing House, the authority to debit monthly EMI from customers’ bank account and credit the same to their loan account or lender’s account. The ECS mandate ensures transparent and hassle-free EMI transactions and payments.

Types of ECS Mandate

Here are some types of ECS mandate commonly used in India: 

1. ECS Debit  

ECS debit happens when money is automatically deducted from your account in the form of EMI, credit card bill, utility bills, and subscription plans, among others. ECS debit helps you maintain discipline in terms of loan EMI, bills, and other payments. 

2. ECS Credit 

ECS credit is commonly used for bulk transfers performed by institutions to make payments such as dividends, interest, salary, pension, etc.

Based on the geographical network of bank branches, there are 3 types of ECS operated by the RBI. These are: 

1. Local ECS  

Local ECS is accessible at 81 centers/locations across the country. The branch coverage at each of these ECS centers is limited to the bank’s geographical coverage, typically one city and satellite towns and suburbs adjacent to the city. 

2. Regional ECS  

Regional ECS is provided at 9 centers/locations throughout the country. Regional ECS enables coverage of all central enabled branches in a State or group of States and can be used by institutions seeking to reach beneficiaries within the State/ group of States.   

3. National ECS 

National ECS is the centralized version of ECS Credit, which was introduced in October 2008. The Scheme enables the coverage of all core-banking enabled branches throughout the country.

Features and Benefits of ECS Mandate

Some of the features and benefits of ECS Mandate are:

1. Offers Convenience

The ECS mandate enables automatic payments, which eliminates the need for manual intervention every time a payment is due. This makes it a convenient option for individuals and businesses who have to make regular payments.

2. Time-saving

Since the ECS mandate is automated, it saves time and effort that would have been otherwise spent in initiating and tracking individual payments.

3. Provides Accuracy and Transparency

The automated nature of ECS mandate reduces the chances of errors in payment processing as it eliminates the possibility of manual errors.

4. Offers Flexibility

It provides flexibility in terms of payment frequency, allowing individuals and businesses to choose payment schedules that suit their needs.

5. Cost-effective

ECS mandate charges are zero. This makes it a cost-effective payment option as it reduces the need for manual processing, which in turn reduces administrative costs.

6. Minimal Paperwork

The ECS mandate requires minimal paperwork, and the authorisation form can be completed easily.

7. Zero Human Intervention

The entire process is automatic and doesn’t require any human intervention.

Also Read

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Line of Credit (LOC) – What is It and How to Apply?

ECS Mandate Charges

The Reserve Bank of India has deregulated the fees charged for ECS transactions. Bank branches cannot charge processing or service fees for debiting or crediting customers’ accounts. However, the sponsor banks or the clearing house must disclose the ECS charges, if any, transparently. 

How to Avail an ECS Mandate?

To avail of the ECS mandate, customers must notify their bank and provide an ECS mandate authorizing the institution to debit or credit the payments through the bank. The mandate includes information about the customer’s bank branch and account information. The bank will provide an ECS mandate form, which must be completed and signed as an official authorizing document.  

It is the ECS user’s responsibility to communicate the following details: 

• The amount being credited or debited to the account
• Date of the debit 
• The purpose of the debit
• The validity period for each mandate 
• Other relevant payment details. 

The bank will notify you that the money has been debited from your account via mobile alerts or messages.

How to Cancel an ECS Mandate?

Final Word

ECS mandate gives users the flexibility and transparency in their transactions. Instead of paying utility bills by cash or cheque payments, an individual or a company can make it through ECS. Suppose the company has the facility of payment through ECS. In that case, the client can mandate the company to automatically receive the utility bill amount from his bank account without any hassle.

Planning to take a loan but worried about EMI payments? Apply for a Navi Cash Loan, select your preferred EMI date, set up auto-debit, get the amount disbursed within minutes and payEMI hassle-free! The entire process – from loan application to disbursal – hardly takes a few minutes.

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