✓ Fast Processing ✓ Great Discounts & Offers ✓ Easy EMI Facility | Apply for Credit Card now! Apply Now

What is NACH?

NACH’s full form is the National Automated Clearing House, and this solution was established by the National Payments Corporation of India (NPCI). NACH enables easy transfer of funds between banks electronically. 


It is a central system that helps strengthen the local and regional ECS (Electronic Clearing Service) systems that were previously used for bulk transactions. With NACH, banks across the country can carry out a large number of electronic fund transfers. 


The word ‘automated’ in the NACH full form also reveals its primary function, as this system is best used for recurring or repetitive payments. It also supports Aadhaar-linked transactions. Apart from being a scalable system, NACH is also safe with multiple levels of data validation. 


As a bank account holder, you can authorise payments to be deducted directly from your account using the NACH mandate. This may be for loan EMIs, credit card payments, utility bills, SIPs or insurance premiums. 


NACH supports the financial inclusion policies of the government by being available on all days of the year as of August 2021. 

What is the Difference between ECS and NACH?

It functions as a system that allows electronic credit and debit transactions from your account at regular intervals. While this may seem similar to the offerings of NACH, there are some critical differences between the two



NACH is an automated and web-based process.

ECS involves a manual process and, hence, takes time to settle a transaction

You get a Unique Mandate Reference Number (UMRN) that can be used for future references

ECS does not provide a reference number

NACH has a very convenient application process and involves minimal paperwork

ECS involves a significant amount of paperwork and has a high chance of rejection

NACH payments are settled in a day

ECS payments can take up to 4 days to settle

NACH has a dedicated dispute management system

ECS has no dedicated dispute management

NACH registration gets confirmed by the end of the day

ECS registration process can take anywhere between 25 to 30 days

What are the Types of NACH?

There are two types of NACH mandates that facilitate the electronic transfer of funds:

  • NACH Debit

NACH debit is designed to make the process of collecting recurring payments like EMIs, bills, etc., easier for organisations. It helps automatically deduct funds from a large pool of customers  a single settlement. Organisations can also track NACH debit transactions via online channels.

  • NACH Credit

NACH credit allows  businesses to make sizable payments directly into the bank accounts of a large pool of beneficiaries. A  unit controls the high-value transactions done through a single system. Corporates and other large organisations can leverage the NACH credit facility to distribute salaries, interest, etc.

Objectives of NACH

  • NACH functions as a centralised system for multiple ECS systems.

  • It uses technology to offer an advanced platform that is capable huge volumes of repetitive payments.

  • The rules and practices for electronic transactions are easy to follow and common for all participants.

  • It supports Aadhaar-based and mobile-based ACH transactions

What is eNACH and eMandate?

e-NACH and e-Mandate are simply services that aid both customers and merchants in handling recurring payments. While both deliver the same results, they are slightly different in their structure.


On the one hand, e-NACH is facilitated by NPCI, which covers more than 40+ banks. On the other hand, e-Mandates are managed by individual banks and are available for only a handful of them. If you were to opt for e-NACH, you would need to fill up a form online on your bank website and get it approved by the destination bank. For an e-mandate, you can set it up directly by completing a one-time transaction for authorisation on the merchant website.

What is the Process of Availing NACH?

To avail NACH services, you can visit the bank’s website and opt to fill out the NACH mandate form. Once you have filled in the details, you would get redirected to the destination bank’s website. Here, you must authenticate your request using your net banking credentials. The bank would then verify the account number and decide whether to accept or reject it. If accepted, the mandate gets confirmed and future transactions can be scheduled. You would receive a number known as the UMRN.

What is UMRN?

UMRN stands for ‘Unique Mandate Reference Number’ and is associated with your NACH mandate creation. It is generated automatically by the NACH system when creating your mandate. You can use this to track your mandate details later and amend or cancel them.

Features and Benefits of NACH Mandate

For Consumers

For Organisations

For Banks

  • Makes it easier to handle recurring payments as the Process is automated
  • It is time-saving as transactions can be settled in a single day
  • As the funds are auto-debited, there is no need to remember the dates for each recurring payment
  • Easy access and swift cancellation make it user-friendly
  • Using only the net banking credentials, you can authenticate your transfer request via NACH
  • The process is safe and secure
  • The online NACH mandate does away with the need to clear high volumes of cheque payments
  • It saves time as the approval time is minimal for sending money to a large pool of beneficiaries
  • Higher customer satisfaction owing to easy bill settlement
  • Better customer relations owing to faster approval of payments
  • Timesaving and less complex as there is no need for cheque clearing
  • The online transactions make the service more manageable
  • Chances of fraud and thefts are reduced significantly
  • The cost of invoicing can be done away with
  • No probability of late payments

What is a NACH Form?

To avail the automatic, scheduled payment service offered by NACH, you need to fill up a form known as the NACH mandate form. By filling in the form and placing a request, you give the bank the right to debit your account periodically for a fixed tenure. The recipient account also reviews the NACH form and accepts the mandate to allow the auto-debit of funds from your account.

Which Banks Provide NACH as a Service?

All major banks in the country currently offer NACH as a payment service. This includes Axis Bank, HDFC Bank, Citibank, State Bank of India, ICICI Bank, RBL Bank, etc.

What are NACH Charges?

Certain NACH mandate charges are applicable on NACH transactions. For e-mandates, the processing fee is payable both by the sponsor bank as well as the destination bank. Also, the destination bank is expected to pay the penalty if the mandate isn’t processed within ten working days.

What is Meant by NACH Mandate Cancellation?

NACH mandate cancellation refers to the removal of the automatic debit instruction linked to your account. Such debit instructions could be related to utility bill payments, payment of insurance premiums, etc. Most banks offer the option to cancel the NACH mandate online. You can use the NACH mandate cancellation form to nullify a mandate.


What is a NACH mandate?

The National Automated Clearing House (NACH) service facilitates the electronic, interbank transfer of funds, which are recurring in nature, without any manual intervention.

How do I check my NACH mandate status?

To check your NACH mandate status, you would need to follow the steps mentioned below:


  • Sign in to your bank’s net banking portal or mobile banking app.

  • On the home page, click on ‘Service Request’.

  • Choose the ‘Account Related’ option to view your NACH status.

What is a NACH payment?

NACH payment refers to the automatic debit of funds from one bank account and credit to another without manual intervention. You can avail the service by filling in the NACH mandate form.

Is a NACH mandate safe?

Yes, the National Payments Corporation of India governs and facilitates the NACH mandate and is entirely safe.

What is the meaning of NACH in banking?

NACH or National Automated Clearing House refers to the interbank transfer of funds electronically. Transactions made using NACH are recurring in nature.

Loan Offer
Download App
Credit Score