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National Automated Clearing House: Meaning, NACH Mandate, Charges Research Team | Posted On Thursday, November 07,2019, 12:52 PM

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National Automated Clearing House: Meaning, NACH Mandate, Charges



What is NACH?

The NACH or National Automated Clearing House was introduced by the National Payments Corporation of India or NPCI. NACH is suitable for electronic transfers, high volume transactions and even interbank transactions which are periodic in nature. NACH was introduced by NPCI as an improvement over ECS or the Electronic Clearing System.  

The primary use of the NACH system is the distribution of dividends, subsidies, salary, pension, interest and so on. It can also be used for bulk transactions like telephone, electricity, water, loans, mutual fund investments, and insurance premium.


  • NACH is faster than ECS. It offers presentation, settlement and even returns processing.
  • NACH offers an efficient Dispute Management System.
  • It has a robust mandate management system. The unique mandate reference number clearly identifies each mandate.

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National Automated Clearing House: Meaning, NACH Mandate, Charges

What is the NACH mandate?

The NACH mandate is of 2 types:

NACH debit: The NACH debit is mainly used for telephone bill payment, SIPs in mutual funds and paying the electricity bills.

NACH credit: The NACH Credit is used to distribute salaries, dividends, and even interest.

In simple terms, the NACH mandate is an authorization offered by you for institutions to credit or debt funds. The NACH platform has a National Presence.

The NACH mandate management system is offered by the NACH debit to manage debit mandates. It helps amend, manage and cancel payment mandates.

What are e-NACH and e-Mandate?

These are basically the new payment services that allow bank account holders to automate recurring payments. The e-NACH and e-Mandate is an easier way to handle recurring payments like bill payments, insurance premium payments, SIP payments and school fees payments.

How does e-Mandate help you? Let’s say you have availed a life insurance plan. All premium payments are scheduled through a simple online process at the start of the life insurance period. This is better than manually tracking individual premium payments. This eliminates the problems of late fees. E-mandate is a completely online paperless process. The processing time has been reduced from 21 days to just 2 days.

You can set up e-Mandates through net banking transactions from merchant websites. You must complete a one-time net banking transaction authorization after subsequent payments. All you need is an Aadhaar linked bank account to apply for e-Mandate.

Remember: The e-NACH and e-Mandate are two very different services giving the same results. While e-NACH is governed by multiple banks, the e-Mandate is controlled by individual banks.

Where to download NACH form?

You must fill the NACH One Time Mandate Form and get yourself registered under NACH. You need to fill:

Bank Details: This could be bank name, bank branch and account number and even IFSC and MICR Code.

Personal Details: Email ID, mobile number and the signature which you submit to the bank.

Folio Details: Application Number and Folio Number.

The Limit Details: The daily maximum limit.

Time Period: Check the effective time span of the mandate from the start date to the end date.

How to do NACH Registration?

  • Fill up the OTM (One Time Mandate) form in NACH.
  • Make a submission online for registration and verification.
  • Send the form to the relevant bank to complete the registration process.
  • After completion of the registration process, you get confirmation on the registered email ID and mobile.
  • The entire registration process is done in 10-15 days.

NACH Bank List:

List of Top 10 Private Banks in India



 Axis Bank

Kotak Mahindra Bank

YES Bank

Federal Bank

 Induslnd Bank

RBL Bank

Karur Vysya Bank

 Bandhan Bank

List of Top 10 Public Sector Banks in India

State Bank of India

Bank of Baroda

Punjab National Bank

Canara Bank

Bank of India 

Union Bank of India

Central Bank of India 


Syndicate Bank

Indian Bank

For the complete list of banks visit NPCI website.

What are NACH charges?

Advantages of NACH:

  • Avoid high interchange fees of credit card companies.
  • Avoid paper-based cheque transactions of banks and financial institutions.
  • Enables subsidies to be directly transferred to Aadhaar-Linked Bank Accounts.
  • Enables highly secure and speedy transactions.
  • Helps with Mutual Fund SIP investments.

How Does NACH work?

Let’s understand how NACH works for Mutual Fund SIPs:

  • The NACH form has payment instructions for the mutual fund AMC. This is up to a specific amount and for a monthly, quarterly or yearly frequency.
  • The mutual fund houses take your signature on the NACH Form.
  • Banks then submit the documents to NPCI for verification.
  • The NPCI verifies data with banks.

Submit a signed copy of the NACH OTM with the Mutual Fund House like HDFC MF AMC and ICICI Pru AMC. You must submit the OTM form along with a canceled cheque.

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