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What is An ECS Mandate?

ECS or Electronic Clearing Service was launched by the RBI to facilitate bulk fund transfer from one bank to another. With the help of this facility, banks are able to debit loan EMIs automatically on a predetermined date from accounts. The entire process is managed by a clearing house called NACH or National Automated Clearing House. 


An ECS mandate also gives the authority to the clearing house to credit the EMI to your or the lender’s loan account. The ECS mandate contains crucial information such as:

  • Your bank branch details

  • Your bank account number from which EMI has to be debited

  • The date of EMI debit

  • Total amount to be debited


When you avail a credit facility, you have to sign an ECS mandate. The ECS mandate allows NACH to debit the EMI from your account. Whenever a debit/credit happens, you can receive the information on your registered mobile number. 


Here are a few advantages of using the ECS mandate:

  • Avoids delay in EMI payments

  • Minimises paper wastage

  • Eliminates the need to track your payment due dates

  • Avoids the need to visit the branch for providing debit instructions

  • Involves a cost-effective process as it saves time and energy

ECS Features

ECS enables bulk transfer of money from one account to numerous other accounts simultaneously.

For any sort of bulk payment such as interest, salary, dividend, pension or recurring monthly bills, ECS is used to make payments. It's also via ECS that payments for mutual funds or insurance premiums can get auto-debited after a pre-specified timeframe.

Types of ECS

ECS is mainly of two types, depending on the mode of transfer:

  • ECS Credit: When any institution or organization is crediting money to your account each month, be it salary, pension or dividend, it's called ECS credit.
  • ECS Debit: When a particular amount is auto-deducted from your account in lieu of loans, EMI, credit card bill, utility bills or any digital subscription plans, it's known as ECS debit. ECS debit saves both time and effort and is highly convenient.


On the basis of geographic location of bank branches, RBI has further subdivided ECS as:

  • Local ECS: It works across 81 centres across India.
  • Regional ECS: It's limited to 9 centres in the country.
  • National ECS: It's the centralized ECS based in Mumbai.

Benefits of ECS

ECS offers benefits to both organizations and individuals:

1. For Banks:

  • Less Paperwork: Due to ECS, paperwork has been significantly reduced.
  • Smooth Process: Once ECS is activated, all the banks need to do is match key particulars such as name, account number and then credit the amount.
  • No Error: In case the customer, details do not match the process is terminated
  • More Transparency: There's a record of each and every transaction that takes place.

2. For Customers

  • Fast Transfer: The amount is transferred within maximum 3-4 working days.
  • No Bank Visits: There's no need to visit the nearest bank branch and sign cheques to authorize deductions.
  • Enhanced Safety: There's almost negligible chances of fraud.

3. For Organizations/ Institutions:

  • Seamless Bulk Transfers: Since companies and institutions disburse bulk payments to a large number of individuals, ECS ensures that the transfer at a due date takes place smoothly.
  • Less Staff: The number of manpower required for printing, dispatch etc is reduced.

ECS Charges

As per RBI directives, there's no fee charged from customers in ECS transactions. However, there's a nominal charge concerning different banks. Originating bank (the bank from which the amount is deducted) needs to pay Rs. 0.25 for each transaction to the clearing house and Rs. 0.50 to the destination bank. Banks do not levy any additional ECS charges on the customers.

How to Avail ECS Mandate?

In order to set up an ECS mandate, you need to contact your bank and follow the following steps:

  • The bank will provide an ECS mandate form that needs to be duly filled. The form says that you have authorized the bank towards ECS credit or debit deductions.
  • The ECS mandate form will include all crucial details about bank account, name etc. A duly signed ECS mandate form serves as an official authorizing document.
  • There's also an option of the maximum amount that can be debited from the account. In no condition, an amount more than the maximum specified would be deducted.
  • After each transaction, the bank would notify you through SMS regarding all the transaction details.

How does ECS Work?

What is an ECS mandate? If you’ve taken a loan in the past, you will be familiar with this term. The RBI introduced ECS, or Electronic Clearing Service, to facilitate bulk transfers between banks. Most lenders require a signed ECS mandate when sanctioning a loan or allowing the purchase of goods on EMIs. This mandate grants the clearinghouse authorisation to auto-debit monthly instalments on a specific date from your account and transfer the same to the lender’s account. Thus, an ECS mandate is an important document that validates your automatic EMI transfers, helping you never miss a payment due date.

How to Discontinue ECS?

There's ample flexibility in ECS and it can be cancelled anytime the user wants, irrespective of the reason. The bank as well as the payment beneficiary need to be informed well in advance through a written application before you terminate ECS. The application needs to be submitted at least a week before the EMI debit date. There's a dedicated ECS cancellation form that has to be duly filled and submitted by you to the bank. Make sure to double check whether or not the ECS mandate has been cancelled after stipulated time by checking your bank transaction details.


What is an electronic clearing service?

Electronic clearing service is a quick, reliable, safe and efficient way to transfer money from one bank account to another. It's used both for credit as well as debit. For instance, salaries, pensions, interest etc are all transferred in bulk via the ECS. Also, the auto-debit of EMI or any recurring loans or other utility bills at a particular date takes place through ECS. Whenever an amount is credited or debited through ECS, the bank sends a notification to the account holder.

Do ECS have a limit? What is an ECS limit?

There's usually no limit on the amount that can be transferred or disbursed via the ECS, however, in case of ECS debit, individual users can specify an ECS limit beyond which no deduction would be made. An ECS limit is the maximum pre-specified amount that can be debited from the bank account.

What is the ECS mandate form for?

ECS mandate form is a document that grants customer's authentication to the bank or the financial organization to debit a particular amount each month from his account in lieu of loan or EMI.

What is the difference between NACH and ECS?

NACH or the National Automated clearing House is a clearing house operated by the National Payment Corporation of India. While both NACH and ECS are used for recurring payment transfers, NACH is faster, robust and used for bigger transactions. In ECS, it takes between 3-4 working days for transactions to process, while in NACH they are processed the same day. Due to enhanced security features, advanced dispute mechanisms and speed, a lot of big organizations are opting for NACH, however, ECS is more extensive in its reach and connection.

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