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.
Till today NACH system would function only on the days when the bank works/ operates but from 01.08.2021, NACH system will function 365 days and now your cheque will get cleared on Sunday as well. Hence, one need to keep balance in bank account before issuing cheque now.
The reason for this is that NACH has, over the pandemic, emerged as a key digital mode of direct benefit transfer. The settlement system is operated by National Payments Corporation of India, which also runs the Unified Payments Interface (UPI).
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