Maintain balance in account as ECS payments will be cleared on holidays
Keep your date with ECS payments as payments will not halt even on holidays
Hyderabad: Ensure there is adequate balance in the bank account if you have given Electronic Clearing System (ECS) mandate for repaying home or vehicle loan installments or for making insurance premium payments.
Reason?
There will be no delay in processing them because the National Automated Clearing Houses (NACH) facility, which processes the ECS payments, will now function all days. Previously, it did not work on closed holidays, Sundays, second and fourth Saturdays.
What does this mean
For instance, if the loan repayment is scheduled for 10th every month. Earlier, many a customer earlier got a day or two reprieve earlier if the loan repayment day (10th) happened to fall on any of these holidays. ECS mandates falling on that days were processed the next working day. But now RBI has made the NACH facility functional on all days. Therefore, loan or other payments electronically scheduled for a particular date will happen on the date, even if is a holiday. The delays in clearing the ECS mandates is reduced.
Penalty?
Bank customers have to ensure there is enough amount to cover the ECS. Failure to keep adequate balance will attract a penalty. “For every transaction declined due to insufficient funds, the bank levies Rs 500 penalty. There is 18 per cent GST on that. That will be Rs 90. So, in total, the excess amount to be paid will be Rs 590,” said an official of SBI.
NACH facilitates payment of dividends, interest, salary, pension, collection of payments pertaining to electricity, gas, telephone, water, loan installments, mutual fund investments, insurance premiums, and others. NACH is a popular and a prominent mode of direct benefit transfer (DBT) to a large number of beneficiaries.
Cheques and Positive Pay
The official said there will be no big impact on physical cheques as of now and will continue to be cleared like before. RBI already has put in a place ‘Positive Pay’ feature since January this year for physical cheques. This makes it mandatory for the cheque issuer to give details of high-value cheques to the banks.
The details include account number, cheque number, date of cheque, amount, transaction code, beneficiary name, and MICR code. These can be submitted via SMS, mobile app, internet banking, ATM or can be given in person at the branch. These details are cross-checked by banks while clearing the cheque and will flag discrepancies if any. Cheques whose details are not registered will be returned unpaid. RBI has also said only cheques that are registered under the Positive Pay system will be accepted under the dispute resolution mechanisms. Customers would get an SMS on whether the cheque is accepted or rejected for any reason.
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