ECS Mandate Charges

Electronic Clearing Services (ECS) is an electronic mode of fund transfer initiated by the RBI. It facilitates bulk funds transfer from one bank account to another. ECSs are repetitive and periodic transactions done by financial institutions for pension, interest, salary, and dividend payments.

It is usually used by lenders to debit EMIs from the borrower. ECS debit transactions are handled by NACH (National Automated Clearing House) under NPCI (National Payments Corporation of India).

Before diving into the ECS mandate charges, here is a quick overview of how this works. To start with, you will have to register and sign an ECS mandate. Once done, the mandate instructs your bank to undertake these tasks:

• Credit or debit a certain amount of money as monthly EMI for your loan or any purchases and credit in your lender’s account periodically.

• Every time the bank debits the amount, you will be notified about the completion of the transaction along with relevant details of your transaction.

Here are some important points you should know about ECS mandates:

• It contains details of your bank account, branch, and other mandatory account information

• While applying for this facility, you should specify the purpose of the debit, the maximum amount the bank should debit, and set a validity period

Your ECS charges depend on the NACH mandate. Transactions made by ECS mandate involve no charges as per the RBI. As per the directive, these charges cannot be levied on the customers by sponsor or beneficiary banks.

Key points to note regarding ECS mandate charges:

• They may be levied on participating banks

• The charges for banks making the transfer (originating banks) are 25 paise to the clearing house and 50 paise to the destination bank per transaction

• Bank branches usually do not apply charges for debiting funds from the customer's accounts

• Banks do not levy such charges while registering for it but can charge you for ECS sign verification

• ECS sign verification charges are available on financial institution’s websites under service charges

Sponsor banks are required to disclose all the levied charges transparently for ECS mandate charges under ECS credit and debit.

ECS NACH mandate charges vary across different banks. Along with ECS sign verification charges, not having an adequate balance will be chargeable. Simply put, additional charges will be levied if your ECS transactions fail due to a low account balance.

ECS mandate charges of some banks are mentioned below.

For more details on ECS mandate charges, contact your respective bank or visit the official website.