Glossary · Banking & Finance
NACH
National Automated Clearing House — a centralised payment system operated by NPCI that facilitates bulk electronic payments and collections.
NACH replaces the older ECS (Electronic Clearing Service) and is used for high-volume, low-value recurring transactions. NACH Credit is used for salary credits, pension, dividend, and interest payments, while NACH Debit is used for EMI, insurance premium, utility bill, and SIP collections. Mandates are registered electronically (e-NACH) through net banking, Aadhaar, or debit card. Settlement happens on T+1 day.
Examples
A mutual fund processes 5 lakh monthly SIP debits in a single NACH file, with ₹50,000 average per transaction.