A financial emergency can happen to anyone at any time. And in such a scenario, loans are one of the quickest solutions. If you are planning to take up a loan, you probably must have come across the term ‘eNACH’. But are you wondering what is eNACH? Or, just confused about the difference between eNACH and eMandate? Well, to discover answers to all your queries about eNACH, read this blog!
What is eNACH?
eNACH stands for electronic National Automated Clearing House. It is an electronic procedure that enables banks, financial institutions, and government organisations to provide automated payment services to their clients. In essence, it replaces the NACH and makes it easier to conduct frequent and repeating massive amounts, small value electronic transfers between banks.
Applicants digitally sign the eNACH application and create a Unique Mandate Registration Number (UMRN) while using eNACH for debit or credit. So, when the eNACH has been activated, it serves as the applicant’s consent for the relevant authority to debit a consented sum periodically.
What is the difference between eNACH and eMandate?
Even though they are frequently used as the same, eNACH and eMandate are two distinct concepts. Both eNACH and eMandate provide payment automation services, but there are some differences between the two payment procedures.
For instance, the eNACH digital framework is managed by NPCI (National Payments Corporation of India). To automate monthly payments, almost all organisations and individuals use eNACH. On the contrary, eMandates are regular requests made by individual users to automatically debit money out of their accounts for things like loan payments, subscription payments, bills and other things.
5 benefits of eNACH—
- The quick process saves your time.
- Forget the hassle of missing out on any due date of repayments like phone bills, OTT subscriptions, or loan EMIs.
- eNACH has a PAN India presence, so your location won’t be a barrier to your payments in this country.
- It has lower failure rates and fewer mandate approval cycles.
- It keeps you updated about your every payment and avoids any confusion in the future. If there is any doubt, you can jump directly to the transaction history provided to you when your payments have been automated through an eMandate.
eNACH and eMandates are one of the modern initiatives adopted by banks and NBFCs these days. Despite being in its early stages, the strategy supports our government’s paperless economy. It has been successfully adopted by a wide range of industry sectors, which has led to notable advancements in their performance by retaining their customers and managing their corporate finances.
Frequently Asked Questions
1. What are the eligibility criteria for eNACH?
The only eligibility criterion is to have an active bank account. Suppose you hold an active Internet banking account or debit card from a specific bank that supports net banking in addition to a debit card as a payment method. In that case, you are qualified for eNACH registration.
2. Is eNACH and eMandate same?
No, eNACH and eMandate are two distinct concepts. To automate monthly payments, almost all organisations and individuals use eNACH. On the contrary, eMandates are regular requests made by individual users to automatically debit money out of their accounts for things like loan payments, subscription payments, bills and other things.