Everything You Need to Know About E-NACH


If you have some knowledge on the loan system, you might have come across the term “NACH” or “E-NACH”. NACH is coined for the term National Automated Clearing House and E-NACH means Electronic NACH. E-NACH basically is an improvement over NACH as it is digital. 

Now, let’s go through in layman’s terms what is NACH. It is defined as a centralized service that aims at providing interbank high volume, low-value transactions that are repetitive and periodic in nature. Offering credit and debt service to corporates, banks, and financial institutions, the service, aimed at integrating all regional ECS into one National Payment System, is claimed to be better than its predecessor, Electronic Clearing Service.“ 

But to understand how E-NACH works, one needs to be introduced to the Electronic Clearing Service to know how NACH is gradually replacing the ECS.


Electronic Clearing Service (ECS) was introduced in India by the Reserve Bank of India (RBI) during the 1990s to facilitate periodic payments like loan installments, insurance premium, distribution of dividend or interest, paying salary, clearing pension, etc.

Similarly, it is used for accumulation of funds by collecting bills like how service providers get money via paid telephone or electricity or water bills. ECS facilitates the transfer of these amounts from one bank account to many bank accounts or vice versa. 


To further strengthen multiple ECS systems running across the country NACH was introduced in the year 2013 to facilitate registration of mandate on the basis of an image of the mandate transmitted through NACH to the customer’s bank. 

Started by the National Payments Corporation of India (NPCI), National Automated Clearing House (NACH) aims to be a better centralized, web-based clearing service. 

National Payments Corporation of India is the regulatory body constitution by the Government of India to oversee all Retails payments in India. It was set up with the guidance and support of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA). NACH is gradually replacing the existing ECS by consolidating all regional ECS systems into one national payment system. 

Difference Between ECS and NACH

  • ECS is available at limited centers in India whereas NACH is operating by RBI and commercial banks and is available across a wider bank network.
  • It is a traditional way of operating using manual processes which struggles with inconsistent timelines whereas new-age NACH platform is design to consolidate the multiple ECS system by removing geographical barriers.
  • This usually takes a 30 days process of activation and 3-4 days for the presentation and settlement process. On the other hand, NACH aims to reduce activation time to 10 days and presentation and settlement process within 24 hours.
  • NACH has an online dispute management system to resolve issues that ECS never had. 
  • ECS does not have any Unique Mandate Registration Reference Number but NACH has, which can be use for future transactions. 

In simple words, NACH is designed to act as an upgraded version of the ECS and make life easier for everyone, from individuals to institutions, who are in the business of making bulk payments and settlements every month, especially in case of Loan Management Software

How is E-NACH Helpful for Normal Customers?

Ever wondering how easy it would have been for all of us. if the standing monthly payments that we have to make were automatically debit from our accounts ?

Be it electricity bill, rent, SIPs, telephone bill, installments/EMIs etc. We often forget and miss the last date of such payments and bear the penalty for paying late. We all have been there most of the time. What if I tell you that E-NACH is the solution in this case ? 

Yes you heard it right. E-NACH helps with such petty things as well. 

Even the companies use it for paying salaries, dividends, interests etc on a particular date at a particular time every month.

So we can figure from here that E-NACH is really helpful when it comes to automating recurring payments. There’s no need to set reminders, go to cafes or sit on systems or any documentation, or fill out forms every month.

Process of E-NACH Setup

Individuals can automate their recurring payments of periodic nature using E-NACH by integrating it into their existing system. There are certain steps to register E-NACH.

1 : You are eligible for E-NACH registration if you have an active Internet banking facility or debit card of a particular bank, which accepts net banking, as well as a debit card as a payment method. If you do not have it, you can apply for the same at the nearest branch of that specific bank.

2 : Contact your bank, the executive there will help you register by asking the details like start date and end date of payment, amount, bank account details etc. you should also confirm whether you want to opt for EMI payment through net banking or debit card. After authentication the form is sendins by your bank to the destination bank.

3 : Next, you’ll get a registration link which will be valid for 10 days on your registered email id or mobile number. You have to verify through this link by giving mandatory details like debit card number or PAN number or expiry date for card etc. 

Finally, you will receive acknowledgment for E-NACH registration. 

What is Wind Finance Doing with this Respect

Wind Finance is our software that we’ve introduced recently for the benefit of NBFCs. With our NBFC software, we intend to weed out the drawbacks that NBFCs usually face and replace it with robust one. There are many features that we provide for the convenience of NBFCs. From the loan management system to end to end digital lending platforms , we have covered it all to make the flow smooth for you. 

One of the many such features is the E-NACH setup. Yes ! We are pleasing to let you know that Wind Finance has the integration of E-NACH setup. To make it easier for the customers, we register E-NACH with their accounts. Customers don’t have to worry about the registration also, we will register them following the above process that we discussed. We ourselves will contact customers’ banks and coordinate between the customer and the bank. You don’t need to worry about anything.  Quite often customers forget about the EMI that they have to pay to NBFCs. And again if the payment is not making on time, late charges or penalty is charged. E-NACH setup is quite useful and that’s why we kept it in our mind while creating the software.

Some of the Key Features E-NACH Ensures are :

  • Real time e-mandate facility.
  • Quick authentication process 
  • Digital from end to end 
  • Secure platform
  • Cost-Efficient 
  • Improves your CIBIL score
  • Easy recurring payments

With digitisation,  secure way of living and making payments through the E-NACH mechanism is the new trend. Although there is still a long way to go. The consumer of today is all set to gain lucrative benefits from an easy mode of transaction. We work to make the lives of customers easy.

We want to encourage you to go through the features of our software.  Read through and see for yourself if it is helpful enough. To know more about it, visit our website https://windfinance.in/