Let's say you purchased a brand new washing machine on EMI. Instead of manually paying the amount every month, you've authorized your bank to transfer the EMI directly from your bank account on the respective due date.
eNACH does the same with your insurance premiums. It allows you to automate all your payments at the beginning of the insurance period, so you won't have to remember the due dates and manually pay individual premiums. This makes your premium paying experience prompt and hassle-free!
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eNACH is a secure, online system in India that allows you to give digital permission for automatic regular payments directly from your bank account. Instead of filling out and submitting a paper form, you can approve the payment mandate electronically.
NACH stands for National Automated Clearing House, and eNACH is the digital version of it. eNACH is a centralised, internet-based system. It was launched by the National Payment Corporation of India (NPCI) to encourage high-volume, regular electronic transactions across banks in India.
ECS (Electronic Clearing Service) is an older system for automatic payments, limited to select institutions only. eNACH is the modern, nation-wide digital platform, which can take the place of ECS, with a higher success rate and faster processing.
The e NACH registration process can be carried out online within a few minutes. You (the customer) have to reach out to your bank and initiate the mandate. You will have to provide and verify details, choose the debit card/net banking/ Aadhaar option, and proceed. An OTP will be sent to complete the registration process.
It is used by corporations, government agencies, and financial institutions (like insurers and mutual funds) for bulk, repetitive transactions such as salaries, pensions, dividends, and recurring bill payments. Individuals can use it to set up recurring payments for bills, EMIs, insurance premiums, etc.
The maximum amount set for an eNACH mandate is ₹1 crore per day. You can check with your bank or preferred UPI platform for their specified limits.
There are two primary types of eNACH transactions, which means individuals and institutions can opt for either of them based on their needs:
eNACH Credit: This is used for mass crediting of funds into multiple bank accounts. It is ideal when one needs to make bulk payments, such as a company disbursing salaries to its employees.
eNACH Debit: This is used for mass collection of funds. It allows institutions like banks, insurance companies, and others to automatically collect recurring payments from a large number of customers.
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