The Buyt Desk
Reserve Bank of India announced that the National Automated Clearing House (NACH) will function every day. It will be operational not only 7 days a week but even on public holidays and festival days. I am sure you must have noticed that whenever an extended weekend or a holiday falls in the first week of the month your salary gets delayed by those many days. But not anymore with NACH being operational on all the days which will be functional from 1st August 2021.
What is NACH?
It is a payment system through which bulk payments like salaries, interest, and pension are paid to a larger group of people on the same day. It is operated by the National Payments Corporation of India (NPCI). Institution, companies and even the government use this system to make payment to many bank accounts. NACH also enables payment of home loan instalment, insurance premium and your bills. The government is also using NACH to transfer government cash subsidy to the needy.
How NACH eases your life?
NACH takes care of auto-debit and credit to your bank account. All of us have a fixed date for any payments and these payments use NACH to ensure that the money reaches the desired account on that given day.
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Salaries are distributed through NACH system. So companies/offices use NACH to deliver salaries to several accounts on the same day.
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NACH is used to ensure that your home loan EMI reaches your bank on the particular date that you have chosen. When you give an electronic transfer mandate to your bank they use NACH to implement this.
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Your monthly Systematic Invest Plan investments towards mutual fund or any other fixed-income instrument are handled by NACH.
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All the auto-debit facility related to bill payments like electricity bill, insurance premium, mobile bill payments are done through NACH.
