What is NACH, ECS or NEFT in Banking System

• ECS: Elecronic Clearing System
• NACH: National Automated Clearing House

NACH (National Automated Clearing House) which is the upgraded version of ECS and introduced by National Payments Corporation of India, is a centralised clearing service that aims at providing interbank high volume, low-value transactions that are repetitive and periodic in nature. It has both transaction and file-based transaction processing capabilities. It has binded multiple ECS(Electronic Clearing System) or all the banks in India under one system.

ACH payments are generally executed in batches, and the batches are processed only on a normal bank day.

It offers credit and debit service to corporates, banks, and financial institutions. According to the service’s website, “NACH System can be used for making bulk transactions towards the distribution of subsidies, dividends, interest, salary, pension etc. and also for bulk transactions towards the collection of payments pertaining to telephone, electricity, water, loans, investments in mutual funds, insurance premium etc.”

ECS: Electronic Clearing Service, or ECS, is an electronic clearing service that facilitates funds transfer between bank accounts. The service was started by Reserve Bank of India providing, both, debit and credit wich can be used to pay utility bills.