NACH Debit

The National Payments Corporation of India (NPCI) offers to banks, financial institutions, Corporates and Government/s a service termed as “National Automated Clearing House (NACH)” which includes both Debit and Credit. It shall be referred to as NACH. NACH (Debit) & NACH (Credit) aims at facilitating interbank high volume, low value debit/credit transactions, which are repetitive in nature, electronically using the NPCI service.

Benefits of NACH debit are as follows:

• Standardization and digitization of mandates allowing complete audit trail of the Mandate lifecycle.
• Simplification of the mandate acceptance and recording process. Will result in reduced operational cost for the banks and its clients.
• Will result in higher revenues for the banks and its clients as the scope of services expand pan India - beyond the 90 clearing centres.
• Unique identifier number allocated to each mandate (UMRN – Unique Mandate Reference Number).
• Secure web access for file upload/download, dissuading the concept of regional NCC/Clearing House submissions.
• Mandates can be processed by the member for any branch across the country. Allows corporate clients to directly upload files for approval (DCA)
• Functions on International Messaging Standard - ISO 20022. Minimal time taken to activate the Mandate – same day processing possible.
• Corporates get to have direct access to the NACH systems, making it easier for them to get access to status of transaction/mandate without delay.
• Reduction of the uploading work to the sponsor banks, since the file upload will be done by the corporates themselves.

Mandate Management System is a service of NACH Debit which facilitates the process of Mandate Creation, Mandate Amendment, and Mandate Cancellation and offers all MIS related to the Mandate.

• Mandate Creation: Creation of a new mandate in favour of the User Institution.
• Mandate Amendment: Amendment of any of the variables of an existing Mandate, which is Active. UMRN needs to be quoted for Amendment.
• Mandate Cancellation: Cancellation of an active mandate – UMRN is required to be quoted

There are two methods for creation of a mandate:

• UI based: The user can log into the NPCI provided MMS utility and initiate a mandate using a user interface.
• File based: The MMS utility also gives the user the facility to upload more than once mandate through a file upload method. File format accepted will be XML only.

The bank can use the UI option for uploading singular mandates. The UI allows the bank to create Mandate and approve it at any point of time during the day (between SOD and EOD), without linkage to the MRC and MARC cycles. The file based method for creation of a mandate is particularly for supporting the banks automated process of initiating more than one mandate at a time.

• Mandate Creation : Pain009
• Mandate Amendment : Pain010
• Mandate Cancellation : Pain 011

Response and Acknowledgement for each of the request s will be provided in Pain012 format. Kindly refer section 2.3 of the Bank Specification Document (BSD) to gather more details on the file formats.

The mandate has to be in the size of a standard cheque ie. 8” x 3 2/3”. It is mandatory to restrict the mandate to the size mentioned above.

Given below is the specification of the scanned mandate.

• The Image should be in black & white and two images to be provided.
• One Image should be in JPEG Format
• One Image should be in TIFF Format

The bank can upload any number of mandates to the MMS system, provided a single image file doesn’t exceed 100 KB and a single zip file with multiple image and data files doesn’t exceed 10 MB. The utility allows the bank to upload multiple zip files.

• Physical Mandate
  • Rs. 1 crore
• E Mandate
  • For recurring payments - Rs. 10 lakhs
  • Security mandate – Rs. 50 lakhs
• eSign based E – Mandate
  • Rs. 1 lakh

Yes, all the user institutions should provide a facility that shall include physical request, online request including request through registered email of the customer. on receipt of withdrawal instructions from its customer, it is obligatory on the part of the User institution not to include the transaction pertaining to such customers.

Reference may be taken from procedural guidelines issued by RBI in 2015 for ECS debit which is applicable for NACH debit as well. The account holder / customer is also entitled to withdraw the mandate / debit instruction from his / her banker without involvement of the User institution. The withdrawal instructions of a customer in such cases would be treated equivalent to a ‘stop payment’ instruction in cheque clearing system. The destination bank branches would provide such withdrawal of mandate information to the Users, on request. Thereafter, the User institution shall stop including the relative transaction in the debit files, after receipt of such countermanding by the customer.

A customer can issue a mandate for a maximum duration of 50 years. Alternately the customer can issue a mandate with “until cancelled’ as the criteria. In this case the validity of the mandate will be perpetual and the customer should note to withdraw the mandate as and when the purpose for which the mandate is issued is