If you have ever used the magical process of automating your bill payments, SIPS etc, you have used NACH services
Payment systems have evolved over years in India, One such program by the National Payments Corporation of India is NACH. NPCI – National Payments Corporation of India offers to Financial Institutions, Banks, Corporate and Government a Service which is called National Automated Clearing House i.e. NACH.
NACH aims at facilitating electronic Interbank High or Low Volume Debit/Credit transactions which are repetitive in nature.
There are two types of NACH Mandates
NACH – Debit
NACH Debit is used for collection of payments like Telephone bills, Mutual Funds – SIPS, Electricity bills etc.
NACH – Credit
NACH Credit is used to distribute Salaries, Dividend, and Interest etc.
In simple words, NACH Mandate is am authorization that consumers provide to Institutions to Credit or Debit funds. The Main Motive of NACH mandate is to facilitate funds transfer High or Low Volumes Electronically, the NACH Platform has 82000+ Banks linked giving it a huge national presence . NACH makes it easy for institutions to Credit Salaries, Dividends at once to large number if recipients, similarly facilitates them to also collect payments regularly from consumers
What is NACH Mandate Management System?
NACH Mandate management system is a service provided by NACH Debit to manage Debit mandates of Clients, It allows you to Manage, Amend and Cancellation of Payment mandates
Why does the SAMCO Account opening KYC Form have a NACH Mandate?
The last page of the SAMCO Demat Account opening form has a NACH mandate along with details regarding the same. SAMCO collects a NACH authorization for clients for ease of debiting customers for the demat account maintenance charges and other such statutory obligations of the clients. This is done so that there is no manual follow up done with clients and no defaults on the account of the clients and thereby enabling uninterrupted service. Since the debits are recovered through the NACH mandate authorisation, the same are not debited to the ledger which may otherwise reduce the trading limits available to a client.