NACH Full Form

NACH stands for (National Automated Clearing House) is a centralized system that operates as a funds clearing platform, simplifying payments, saving time and eliminating any chances of fraud. 

The world today is becoming technologically advanced every passing day, leaving little room for inconvenience. The government of India has taken various measures to make banking easier for everyone by digitizing the banking processes, one such innovation is NACH or National Automated Clearing House.

Over the years, NACH in banking has become the backbone of effective and efficient transaction processes. This guide lists NACH meaning and its features, benefits and types. Dive in!

NACH Meaning

NACH full form in banking is ‘National Automated Clearing House’. This centralized system, first created in 2016, was developed by the NPCI or National Payments Corporation of India. NACH in banking is similar to Electronic Clearing Systems (ECS) and operates as a funds clearing platform, simplifying payments, saving time and eliminating any chances of fraud. 

NACH is used by financial institutions, organizations, and governments as an online solution to facilitate interbank and bulk transactions electronically. Many repeated payments, such as loan EMIs and utility bills, can be automated or deducted from a customer’s account if NACH is enabled.

What is eNACH

Having understood NACH meaning, let’s have a look at eNACH meaning. It is an instrument that collects payments electronically from a customer’s bank account with the help of the NACH system.

Service providers and businesses use e-NACH to collect regular instalments from their consumers, including loan EMIs, utility bills, subscription fees, and insurance premiums. The primary goal of e-NACH is to reduce the processing impact on the recipient’s bank, shorten mandate approval cycles, and ensure mandate acceptance security.

Features and Benefits

Having understood what is NACH, take a look at its following features and benefits: 

  • This instrument is secure and safe.
  • You can log in to your net banking account to approve your NACH transfer request.
  • The user-friendly interface is easy to navigate and offers quick cancellation.
  • It eliminates the chance of late payments.
  • The risks of theft and fraud are greatly reduced.
  • You can easily settle bills which results in increased client satisfaction.
  • Organizations end up saving time as a large number of beneficiaries receive funds rapidly due to the short approval process.
  • This online mandate does not entail clearing large amounts of cheques. 

Types of NACH

Having understood what is NACH mandate, let us understand the type of NACH.

1. NACH Credit

NACH Credit is an electronic payment facility used by an institution to credit a large pool of recipients’ registered bank accounts. This is then used to make a payment towards pensions, salaries, interest, dividends, and other benefits. It only debits the user institution’s bank account once (corporate NACH enrollment).

2. NACH Debit

NACH Debit allows a corporation to collect insurance premiums, mutual fund investments, EMI payments, tax/cess, and water/electricity/telephone bills. A user institution gets these recurring or periodic payments from a large number of customers.

How to Apply for NACH

You can set up NACH in banking through the internet, sitting comfortably at home. Just follow the steps mentioned below. 

  1. Visit the official website of your bank and fill out the details in the NACH mandate form
  2. The portal will redirect you to your bank’s website where you will need to validate the request by logging in.
  3. The bank will take some time to verify the details entered by you to approve or reject the decision
  4. Once your request is approved, you can schedule any transactions for future
  5. You will get a Unique Mandate Reference Number (UMRN) for future reference

Charges Associated with NACH

NACH charges differ from one bank to another. For instance, ICICI Bank charges a penalty of Rs. 500 per instance on a NACH return whereas Axis Bank charges Rs. 25 per transaction with a cap of Rs. 100 per month as NACH transaction charges. 

How to Cancel the NACH Mandate?

You need to follow the below-mentioned steps to cancel the NACH mandate:

  1. Visit and log in to your bank account from which you set up the NACH mandate
  2. Opt for the ‘Services Request’ option
  3. Locate the ‘Account Related’ corner and click on it
  4. Select the ‘NACH Service Cancel’ option

How to Check the NACH Mandate Status?

You need to follow the below-mentioned steps to check the status of the NACH mandate:

  1. Visit and log in to your bank account from which you set up the NACH mandate
  2. Opt for the ‘Services Request’ option
  3. Your NACH mandate status will be visible on your screen

What is e-Mandate and e-NACH?


The e-Mandate system, established by the NPCI following Reserve Bank of India (RBI) rules, is an important electronic payment mechanism for Indian consumers and enterprises. It gives electronic authorization to eliminate the hassle of making recurrent transactions manually.


Electronic National Automated Clearing House (e-NACH) is a financial system that enables banks and other financial institutions to streamline payment operations, particularly for regular transactions. This system ensures that transactions are completed quickly and accurately, whether utility bills, subscriptions, or other monthly payments.

What is UMRN?

The UMRN is a unique mandate reference number assigned to each new mandate generated via NACH Debit. It is generated automatically by the NACH system upon mandate creation and is required for all transactions, including mandate amendments and cancellations.

Differences Between NACH and ECS

NACH and ECS can be quite confusing and a mistake can be made by interchanging the two terms. However, there are a few substantial differences between the two, a few of which are mentioned below.

  • NACH is a centralized system that allows bulk transactions whereas ECS is a regional clearing system that allows bulk transactions within a circle.
  • The NPCI manages NACH whereas the RBI regulates ECS.
  • Clearing a payment through NACH in banking can take up to 24 hours while ECS transactions take up to 3 to 4 days to clear.
  • Users can make two types of transactions through NACH – debit and credit whereas ECS comes to the aid of credit transactions.
  • NACH allows you to track your payments through UMRN whereas ECS has no such tracking system.


NACH in banking has made its space in the financial infrastructure of the country. It is believed that NACH will highly influence the innovation of financial transactions in the future, making it more convenient, safe, and quick.


Is the NACH mandate safe?

Yes, the NACH mandate is safe. It is managed by the NPCI and is equipped with the best safety features that require you to log in to your bank account using your Internet banking credentials to make a transaction.

Why is NACH deducting money from my account?

NACH debit allows a company to auto-debit EMI payments, insurance premiums, investments, tax/cess and different bills among others which are recurring in nature so that you don’t have to manually do the payments individually. 

What is the difference between NACH and Autopay?

NACH is a centralized system that supports bulk transactions whereas UPI autopay allows funds to be transferred immediately irrespective of the amount.