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Product Details

Commonly used Abbreviations

Abbreviations used in NACH

NACH Advocacy & Outreach

National Automated Clearing House (NACH) which was launched in December 2012 is a centralized payment system developed with an aim to consolidate multiple ECS systems running across the country and provides a framework for the removal of local barriers/inhibitors. NACH system provides a national footprint and is expected to cover entire core banking enabled bank branches spread across the country. The NACH system has been designed keeping in view the specific needs of the banks & corporates including a refined Mandate Management framework and an online Dispute Management System (DMS) coupled with a strong information exchange and customized MIS capabilities. NACH system also supports Financial Inclusion measures initiated by government, state agencies and banks by providing support to UID and mobile based Aadhaar transactions.

NACH system supports both credit as well as debit transactions which can be mainly categorized into NACH Credit, NACH Debit and Aadhaar Payment Bridge (APB) System. While NACH Credit system can be used for bulk transactions like distribution of dividends, salary, pension etc. which are repetitive in nature; NACH Debit is used for collection of payments pertaining to EMIs, utility bills, insurance premiums, rent payments, investments in mutual funds etc. APB System has been specifically designed for routing the benefits of various social welfare schemes using the Aadhaar number directly into the bank account of the beneficiary.

The NACH system provides a robust, secure and scalable platform to the participants both banks as well as corporates. It has best in class security features, cost efficiency & payment performance coupled with multi-level data validation facility accessible to all the participants.

Aadhaar Payment Bridge (APB) System uses Aadhaar number of the beneficiary for the direct electronic transfer of various benefits & subsidies doled out by the Government and State run agencies. This Aadhaar based payment service can be used to credit the beneficiary bank account directly, once the Aadhaar number and the bank account number of the recipient are linked thus making it an Aadhaar Enabled Bank Account (AEBA). APB system is largely being used for disbursing benefits of various social welfare schemes like LPG Subsidy, MNREGA, Social Security Pension, Old Age Pension etc. APB System is an attempt towards financial re-engineering of the subsidy/welfare management program. For this benchmark initiative, NPCI's APB System has been awarded 2 prestigious awards in the category of financial inclusion.

Another feature which sets apart NACH system is the Direct Corporate Access (DCA) which provides access of NACH system directly to the corporates thus leading to ease of operations both for the corporates as well as the banks. DCA empowers the corporates to keep a track of its transactions, reports and MIS directly without having a dependency on the sponsor bank.

One of the key aspects of NACH system is an online Dispute Management System (DMS) which provides a common platform to all the participating banks to resolve transaction related issues in a time bound manner with provisions of pre-arbitration, arbitration and good faith.

Within a short period of its launch, the number of participating banks in NACH has grown leaps and bounds and is one of the largest payment systems in terms of banks coverage. The wider coverage of banks has enabled this system to play a crucial role in the payments industry.

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