Overview of NACH

Want to make periodic payments without the hassle? National Automated Clearing House (NACH) enables you to make repetitive and periodic payments/ receipts with ease!

National Payments Corporation of India (NPCI) has implemented “National Automated Clearing House (NACH)” for Banks, Financial Institutions, Corporates and Government a web based solution to facilitate interbank, high volume, electronic transactions which are repetitive and periodic in nature. NACH System can be used for making bulk transactions towards distribution of subsidies, dividends, interest, salary, pension etc. and also for bulk transactions towards collection of payments pertaining to telephone, electricity, water, loans, investments in mutual funds, insurance premium etc.

National Automated Clearing House (NACH) is a centralised system, launched with an aim to consolidate multiple ECS systems running across the country and provides a framework for the harmonization of standard & practices and removes local barriers/inhibitors. NACH system will provide a national footprint and is expected to cover the entire core banking enabled bank branches spread across the geography of the country irrespective of the location of the bank branch.

With the implementation of NACH system, NPCI intends to provide a single set of rules (operating and business), open standards and best industry practices for electronic transactions which are common across all the Participants, Service Providers and Users etc. NACH system also supports Financial Inclusion measures initiated by Government, Government Agencies and Banks by providing support to Aadhaar based transactions.

Features & Benefits

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NACH is used by institutions for making bulk payment of amounts towards distribution of dividend, interest, salary, pension, etc., or for bulk collection of amounts towards telephone / electricity / water dues, cess / tax collections, loan installment repayments, periodic investments in mutual funds, insurance premium etc.
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Essentially, NACH facilitates bulk transfer of monies from one bank account to many bank accounts or vice-versa.
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NACH Credit is used by an institution for affording credit to a large number of beneficiaries (for instance, employees, investors etc.) having accounts with bank branches at various locations by raising a single debit to the bank account of the user institution. 
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NACH Credit enables payment of amounts towards distribution of dividend, interest, salary, pension, etc., of the user institution.
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NACH Debit is used by an institution for raising debits to a large number of accounts (for instance, consumers of utility services, borrowers, investors in mutual funds etc.) maintained with bank branches at various locations for single credit to the bank account of the user institution.
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NACH Debit is useful for payment of telephone / electricity / water bills, cess / tax collections, loan installment repayments, periodic investments in mutual funds, insurance premium etc., that are periodic or repetitive in nature and payable to the user institution by large number of customers etc.

How it works

How to make payments via NACH?

  • Contact the branch where the SB account is maintained and submit an NACH Mandate for permitting them to deduct the loan amount.
  • Submit the copy of mandate at Federal Bank branch where your loan account is located.
  • Through NACH clearing system, Federal Bank will receive the amount as loan installments to your loan account with us

Service Charges

For Service charges and fees, please click here.

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