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Salary, EMIs, Insurance Premium, LPG Subsidy, SIP Payment Rule to Change from Next Month

NACH, operated by the National Payments Corp. of India, facilitates one-to-many credit transfers

NACH, operated by the National Payments Corp. of India, facilitates one-to-many credit transfers

NACH Rule Change: This move will pave the way for a greater customer convenience and will leverage the 24x7 RTGS facility which was recently made available by the RBI, said expert

Starting from next month, your salary will be credited on Sundays and gazetted holidays. The Reserve Bank of India (RBI) has recently announced that National Automated Clearing House (NACH) will be functional all days of the week, effective August 1, 2021. The aim is to enhance the consumer convenience, RBI governor Shaktikanta Das said while announcing the measure.

NACH, operated by the National Payments Corp. of India, facilitates one-to-many credit transfers such as payment of dividend, interest, salary and pension. It also facilitates collection of payments pertaining to electricity, gas, telephone, instalments towards loans, investments in mutual funds and insurance premium. NACH has emerged as a popular and prominent mode of direct benefit transfer (DBT) to a large number of beneficiaries, the central bank noted.

At present, NACH facility is operational only on bank working days. So the auto-debits are not processed during bank holidays, gazetted holidays and even Sundays. “In order to further enhance customer convenience, and to leverage the 24×7 availability of real-time gross settlement (RTGS), NACH which is currently available on bank working days, is proposed to be made available on all days of the week effective from August 1, 2021,” RBI governor Shaktikanta Das said earlier.

This move will bring the processing duration shorter for salary credits, bill payments, insurance premiums and loan EMIs, which were earlier delayed due to bank holidays. This auto-transfer facility has helped transfer of government subsidies during the present COVID-19 in a timely and transparent manner, RBI said.

“Undoubtedly, Nach is an easier way for merchants and buyers to handle recurring payments like insurance premium, SIP, EMI, school fee, utility bills etc. Making it available for all days of the week is a welcome decision and is in the best interest of the customer. However, it will be interesting to see that whether bank will allow the entire payment or restrict it to a limited amount during the non working days," said Zafar Imam, chief executive of of Finshell.

“Beginning August 1, the National Automated Clearing House facility will not be limited to the bank working days, but on all days of the week, thus ensuring bulk payment transfers even on weekends. This move will pave the way for a greater customer convenience and will leverage the 24×7 RTGS facility which was recently made available by the RBI. The flagship program of the Narendra Modi government, the direct benefit transfer, will get a booster dose as the NACH facility starts operating even on the weekends. The availability of NACH on all the days of the week will ensure a prompt transfer of various government subsidies. People under stress due to the pandemic can now receive timely payment under various schemes on time," said Nitin Mathur, chief executive officer, Tavaga Advisory Services.

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first published:July 30, 2021, 16:56 IST