How to Cancel NACH Mandate? – All About eNACH Cancellation

Understanding Mandates and e-NACH Cancellation

The National Automated Clearing House (NACH) is a centralised payment system established by the Reserve Bank of India (RBI). NACH mandate cancellation is an important process that every account holder should understand. The e-NACH represents the digital version of NACH developed by the National Payments Corporation of India (NPCI). The system serves multiple purposes payments of subsidies, pensions, salaries, dividends, and regular consumer transactions such as bills, EMIs, and loan payments.

Learning how to cancel the NACH mandate is important to maintain control over your automatic payments. The mandate is a formal authorisation given to banks and institutions. This authorisation allows the automatic debiting of specified amounts from the customer’s bank account on scheduled dates. Implementing these mandates eliminates the need for manual intervention in regular transactions.

A notable feature is the simplified NACH cancellation process. It replaces the traditional requirement of submitting written requests at bank branches or corporate offices. The system streamlines payments through digital authorisations which significantly reduces paperwork.

How To Cancel e-mandates On NACH Platforms?

1. Log into your bank’s digital platform (website/app) using your credentials and complete authentication via OTP/password.

2. Navigate to the mandate management section, which may be called “Mandates,” “Recurring Transactions,” “Service Requests,” or “ECS/NACH mandates” (typically found under the ‘Services’ or ‘Customer Service’ menu).

3. If prompted, select the relevant bank account from the dropdown menu for which you want to manage mandates.

4. View the list of your active mandates and select the specific one you wish to cancel by clicking on the ‘View’ or ‘Cancel’ option.

5. Verify the mandate details including account number, entity name, maximum amount, and expiry date to ensure you’re canceling the correct mandate.

6. Review and accept the terms and conditions or declaration presented by your bank regarding the cancellation.

7. Confirm your intention to cancel by acknowledging the warning message and proceeding with the cancellation request.

8. Complete the final authentication by entering the OTP sent to your registered mobile number.

9. Wait for the initial SMS confirmation that your cancellation request has been initiated and is being processed.

10. Once processed, you will receive a final confirmation SMS with mandate details (UMR number, entity name, and account details). Please maintain this record for future reference.

How Do e-NACH e-mandates Work?

1. Registration Process for e-mandate

The e-mandate registration process begins with the customer completing the NACH mandate form. Within this form, you specify details like the frequency of auto-debits and the duration for which these EMI payments will continue.

Following the submission, the financial institution performs a thorough verification process of all details provided in the mandate. This includes due diligence of the account information, validation of the customer’s identity, and verification of their banking details.

2. Balance Sheet Presentation

The debit information flow begins with the lender preparing detailed debit instructions as per the mandate terms. These instructions include transaction details like the specific amount to be debited, the scheduled date, and the frequency of transactions. In the payment processing phase, NPCI receives the debit instructions from the sponsor bank and conducts a validation check of all transaction details against the registered mandate.

3. Fund Transfer Process

The final settlement phase involves the crediting of funds to the lender’s account. Transaction records are updated in NPCI’s system, and settlement confirmations are distributed to all involved parties. NPCI maintains oversight throughout this process, confirming the successful completion of each transaction.

Filling Out the NACH Mandate Cancellation Form

1. Enter the date in the format DD/MM/YYYY in the paper NACH form.
2. Check the appropriate box to indicate whether you are creating, editing, or cancelling the mandate.
3. Select the type of bank account you maintain (e.g., savings, current).
4. Enter your bank account number accurately.
5. Fill in the name of your destination bank where the mandate is registered.
6. Provide the respective IFSC/MICR code for your bank.
7. Specify the amount associated with the mandate.
8. Sign as per your bank account records.

NPCI Guidelines For Mandate Cancellation

NPCI has established guidelines for organizations that process electronic NACH mandates. Here are the key requirements:

• Organizations must provide digital channels for mandate cancellation options on their websites and mobile apps.

• Customers should have the flexibility to withdraw their cancellation requests if they decide to continue with their existing mandates.

• Issuing banks must obtain proper certification for handling all types of authentication methods related to mandate cancellation.

• Sponsor banks are required to implement systems for receiving and processing cancellation data.

• Banks must establish reliable data transmission channels to communicate mandate cancellation information to respective corporate entities.

• All authentication and processing systems must maintain high-security standards while remaining user-friendly.

• Organisations must ensure their digital platforms can handle both permanent cancellations and temporary suspension requests.

• The cancellation process must be clearly visible and easily accessible to customers through electronic channels.

Objectives of E-Mandates

The e-mandate system aims to modernize traditional paper-based money transfers by enabling seamless online transactions between businesses and customers. It makes getting and repaying loans easier while encouraging more people to participate in the financial system. The system welcomes all types of users from small businesses to government agencies and banks. Secure processing methods and complete electronic records ensure that all financial transactions remain safe and well-documented.

Benefits of NACH Mandates

1. Easy Payments

The e-NACH system revolutionizes payment processing by introducing a streamlined approach to bulk and high-volume transactions. Payments can be settled within the same day through its automated transfer process. It auto-debits recurring payments like EMIs, bills, and taxes from your account. This saves you from tracking multiple payment due dates.

2. Strong Audit Trail

The e-NACH system maintains detailed transaction histories that support better accountability and compliance. This feature reduces the risk of fraud and theft through systematic tracking mechanisms. This detailed documentation also proves invaluable for audit purposes.

3. User-Friendly Interface

The system offers an intuitive online process that caters to all stakeholders involved in the payment ecosystem. Whether it’s initiating payments or approving transactions, the interface has been designed to be straightforward and accessible. Setting up and managing recurring payment mandates through the platform is also straightforward.

4. Cost-Effective Automation

The e-NACH system eliminates the dependency on paper-based cheques and manual clearing processes. This results in cost savings for all parties involved. The automated processing reduces operational overhead and minimises the time required for payment approvals and processing.

5. Convenient Workflows

The e-NACH system easily integrates into existing business operations. Corporate payment processes like salary disbursements and bonus payments, become streamlined and more efficient. Government agencies benefit from simplified distribution channels for subsidies and grants.

Frequently Asked Questions (FAQs)

1. Can a customer withdraw or terminate a mandate after it has been issued?

Yes, you can stop a bank mandate either by approaching your bank directly or through online mode if your bank supports such a service.

2. How can I cancel my ECS / NACH?

You can cancel ECS/NACH through net banking or mobile banking. For Net Banking: Login, then go to ‘Service Request’, select ‘Account Related’, and choose ‘NACH Cancelation’. For Mobile Banking: Open the app, tap ‘Service Request’, select ‘Account Related’, and choose ‘NACH Cancelation’.

3. What is the NACH cancellation request?

NACH systems automatically deduct monthly payments from your account. You can submit a NACH cancellation request to stop these automatic deductions for bills, EMIs, or other regular payments.

4. When can a customer cancel a NACH?

A customer can cancel a NACH mandate at any time after it has been issued.

5. Are there any fees for NACH cancellation?

Most banks offer free e-NACH cancellation online, but check with your bank as some may charge a processing fee.