NACH Cancellation

For NACH to work, you must first register the mandate, which means authorising the institution to debit or credit money from/to your account. In certain instances, you may want to initiate NACH cancellation. It is not just needed for loans but also for any other service in which money is automatically debited from your account by an institution.

The cancellation process of a NACH mandate is straightforward. If you need to withdraw or cancel a mandate, you can request it from your financial institution. 

You can also remove the mandate/debit instructions from your bank directly. In such instances, your withdrawal instructions would be considered a ‘Stop payment’ instruction in the cheque-clearing system.

The RBI has publicly stated that you could approach your bank or other institution to which you have provided such NACH mandate. These include the following institutions:

• Lender of your bank

• Electricity board

• Mutual fund company

• Water board

• Any other organisation authorised to collect the money from your account

You can initiate the process of NACH cancellation online for some banks, stock brokers as well as mutual fund companies. However, some financial institutions do not allow you to cancel the mandate online. In this case, approaching your bank and opting for NACH cancellation is the best option.

These are the set of instructions to be followed to fill out the NACH mandate cancellation form:

1. Fill in the date in the format DD/MM/YYYY

2. Select the appropriate checkbox to create, edit, or cancel the mandate

3. Check the appropriate box according to the type of bank account you maintain

4. Enter your bank account number

5. Enter the name of the destination bank

6. Fill in the respective IFSC/MICR code

7. Mention the amount of the mandate

8. Select the frequency of the mandate

Further, the following checks are also important:

1. Choose whether the mandated amount is a fixed or a maximum amount

2. Mention the Folio Number as Reference 1

3. Mention the Application Number as Reference 2

4. Provide your telephone number (Optional)

5. Provide your Email ID (Optional)

6. Provide the start and end dates of the NACH registration (Format: DD/MM/YYYY)

7. Leave the start date blank and choose ‘Until cancelled’ if you opt for a perpetual SIP

8. Provide signature as per bank account

9. Mention the holder’s name as per the bank record

Now that you know how to cancel the NACH mandate, here are some guidelines:

• Verify your identity by using a login ID and password, an OTP, and other information

• View a list of registered mandates for your customer ID 

• You can select which mandates you want to cancel, but cancellation requests will only be allowed after verification

• A pop-up message will appear to confirm the cancellation request, and if you agree, the financial institution will proceed with the cancellation

• The financial institution will send an SMS to your registered number regarding the initiation of the NACH cancellation

• Once approved, it will prepare and submit the cancellation file via their sponsor bank on the same day

• After obtaining the final response from NACH via the sponsor bank, the financial institution will update you on the cancellation request

• Upon confirmation of mandate cancellation, the entity will send you an SMS confirming the cancellation

• The financial institution will update its records and stop displaying transactions for your cancelled mandates