Hello,

Guest!

NACH Full Form

Have you missed out on utility bill payments and EMIs on due dates and ended up paying penalties several times? You would be wondering if there was any way that the payments happen automatically. Continue to read to learn about NACH Full Form and how it will save you from the ordeal of remembering due dates.

Updated:

What is the Full Form of NACH?

NACH is a facility introduced by the National Payments Corporation of India to enable automatic payments of bills, EMIs, and a standard amount of funds transfer at regular intervals. Earlier customers had to visit the bank or Insurance Companies to remit the EMI for loans availed and premiums for insurance policies at regular intervals.

With the introduction of NACH, all they have to do is submit a mandate by filling up the required details online, and the remittances will happen automatically on the due date. It is not adequate to know what NACH and its benefits are, but you should also know the NACH Full Form. National Automated Clearing House is the NACH Full Form. Continue to read the article to get an insight into the way NACH works, the benefits of NACH etc.

Also Check: Full Form of IMPS

Features of NACH facility

NACH full form, i.e., National Automated Clearing House, is adopted for paments that have to be done on a regular basis within a stipulated due date, i.e., payment of utility bills, insurance premiums, mutual fund investments, loan EMIs etc. Some of the organisations have shifted to this mode for payments of dividend warrants, salaries, pension etc. The features of the NACH facility is given below:

  • It is faster as it is automated and has no manual intervention.
  • The customers need not go to the bank for making payments and so a lot of time.
  • There is very little scope for errors as the whole process is automated, and there is no manual intervention.
  • The payee’s account is debited automatically, and so there is no time lapse in the movement of a physical instrument as in the case of payment through cheques where the instrument has to move from one place to another.
  • Payments of salaries, pension and dividend warrants happen on the stipulated date without delay.
  • If you have too many bills and EMIs to pay, you will not have the hassle to remember dates as the payments happen automatically.
  • There will be no EMI missouts or delay in payment of utility bills as every payment occurs on the due date automatically unless you have not maintained the required balance in your account on the due date.
  • The NACH mandate can be submitted online, and there is no paperwork involved.
  • The transactions done through NACH are safe.

Also Check: Full Form of CLG

What is the NACH process?

To avail of the NACH Full-Form, i.e., National Automated Clearing House service, you will have to sign an online mandate by filling up the form with the required details. The following details have to be mentioned in the NACH form.

  • Fill up the date in DDMMYYYY format.
  • A check box will be provided, which can be ticked if you have to edit any details.
  • Choose the type of bank account from the dropdown menu.
  • Provide the bank account details for debit.
  • Provide the IFSC/MICR code
  • The amount of the mandate should be both in figures and words.
  • Mentions specifically the periodicity of the debit, i.e., monthly, bimonthly, quarterly, etc.
  • Should mention if the mandated amount is fixed or the maximum, for instance, in the case of credit card bills where there is no fixed amount. It can be either the minimum amount due or the total amount due. You will have to specify.
  • Providing the mobile number and Email ID is optional.
  • Your signature on the NACH mandate and the Name in the NACH mandate should match with the signature and Name in bank records.

Once the NACH mandate is filled up, signed and submitted, the debits will happen automatically, and you will be free from the hassle of remembering due dates for payments of various bills/EMIs/Credit Card dues. All the payments will happen automatically on due dates. You should ensure that there is an adequate balance in your account to honor the debits on the due dates.

Additional Reading: How to get loans for bad credit?

What are the different types of NACH?

With NACH, both debits, as well as credit transactions, are possible.

  • The debit process in NACH involves periodical payments. For instance, payment of utility bills which is on a monthly basis, EMI and credit card dues, which are monthly payments, insurance premiums that could be monthly, quarterly, half-yearly or yearly, etc. This makes the collection of bills, EMIs, Credit Card dues, premiums for organisations as the automatic deduction of these payments for a large cluster of customers simultaneously, and it is by large the safest and most secure mode of payment. It is even possible for the organisations to track the NACH Mandate registration through online channels with the reference number provided on registration for NACH.
  • The credit process in NACH enables businesses that are authorised to make bulk payments directly into the beneficiaries' bank accounts. A centralised unit engages a single system to control transactions that are of high value. Corporates and Organisations that need to pay salaries to many employees can derive the benefit of this bulk credit provision provided by NACH.

Additional Reading: How to check free cibil score?

What is the difference between NACH and ECS?

Though NACH and ECS involve automatic debit or recurring payments like utility bills, loan EMIs etc., there is a lot of difference between the two modes of payment.

NACH

ECS

Online application process that involves minimum or no paperworkInvolves a lot of paperwork and the chances of rejection are high
The settlement of payment happens in a dayIt takes 3 to 5 days for the payment settlement.
Has a dispute management system that resolves disputes efficientlyThere is no dispute management system
You get confirmation of NACH registration the same dayIt takes about 25 to 30 days for ECS registration
Can track the NACH payment through online channels with the reference number provided on registration for NACH.No reference number will be provided. Difficult to track the transaction.

Additional Reading: How to calculate credit score?

What is the process involved in NACH cancellation?

NACH Mandate cancellation means delinking the bank account through which the payments of utility bills, EMIs, Insurance Premiums etc., were enabled. Or, in other words cancelling the automatic payment instructions for the bills, EMIs, Insurance Premiums etc.

Most financial institutions have provided an online NACH mandate cancellation facility. You will have to just fill up an online NACH cancellation form and submit the same.

Also Check: NEFT Full Form

Conclusion

After getting an insight into the NACH Full Form and the benefits that you can derive out of this payment method, you should contemplate providing a NACH Mandate for all your payments, especially if you have several utility bills, EMIs, and other investment payments to be made and all on different due dates.  

By opting for the NACH facility, you can save yourself from the ordeal of remembering due dates for several payments. This is by large the safest and most secure mode of payment. You will not miss out on any Utility bill, loan EMI, Premium or any other recurring payment as it is automatically done by NACH. Your only responsibility will be to maintain sufficient balance to honour the mandate on due dates.

Additional Reading: Check Credit Bureau of India

NACH FAQs

✅What is a NACH Mandate Form?

image

To avail of the automated payment service of NACH, you will have to fill up an online form which is the NACH Mandate Form

✅What is the difference between e-NACH and e-Mandate?

image

The services offered by NACH and e-Mandate are similar, but there is a difference in the structure. While e-NACH is facilitated by NPCI and available for more than 40 banks, e-Mandate is facilitated by individual banks and is available for a few customers.

To avail of the e-NACH facility, you will have to fill up the NACH Mandate form on the bank website of your bank, and it has to be approved by the destination bank. For e-Mandate, a one-time setting through net banking of the respective bank can be done, which has to be authorised on the merchant website.

✅What is UMRN?

image

UMRN is the Unique Mandate Reference Number that is provided whenever you register for a NACH mandate.