Saturday, November 21, 2009

What is Electronic Clearing System (ECS) ?

Electronic clearing system is a mode of electronic funds transfer from one bank account to another using the services of a clearing house. This is normally for bulk transfers from one account to many accounts or vice - versa. This can be used for making payments like distribution of divided, interest, salary, pension, etc. by institutions or for collection of amounts for purposes such as house tax, water tax, etc or for loan installments of financial institutions/banks or regular investments of persons.

There are two types of ECS called ECS (Credit) and ECS (Debit).

ECS (Credit) is used for affording credit to a large number of beneficiaries by raising a single debit to an amount, such as dividend, interest or salary payment.

ECS (Debit) is used for raising debits to a number of accounts of consumers/account holders for crediting a particular institution.

ECS payment can be initiated by an institution who have to make bulk or repetitive payments to a number of beneficiaries. They can initiate the transactions after registering themselves with an approved clearing house. ECS users have also to obtain the consent as also the account particulars of the beneficiary for participating the ECS clearings.

The ECS user's bank is called as the sponsor bank under the scheme and the ECS beneficiary account holder is called the destination account holder. The destination account holder's bank or beneficiaries bank is called the destination bank.

The beneficiaries of the regular or repetitive payments can also request the paying institution to make use of the ECS (Credit) mechanism for effecting payment.

The ECS users intending to effect payments have to submit the data in a specified format to one of the approved clearing houses. The list of the approved clearing houses or the list of centres where the ECS facility has been provided is available at www.rbi.org.in

The clearing house would debit the account of the ECS user through the account of the sponsor bank on the appointed day and credit the accounts of the receipts banks, for affording onwards credit to the accounts of the ultimate beneficiaries.

Advantages of ECS to the Banks:

  • Banks handling ECS get freed of paper handling.
  • Paper handling also creates lot of pressure on banks as they have to encode the instruments, present them in clearing, monitor their return and follow up with the concerned bank and customers.
  • In ECS banks simply get the payment particulars relating to their customers. All they need to do is to match the account particulars like name, account number and credit the proceeds.
  • Wherever the details do not match, they have to return it back, as per the procedure.

10 comments:

  1. Once you get caught at intervals the snare of religious vacation on-line day loans and check developments, it's on the aim of be durable payday loans and valuable to induce out. Avoid the snare altogether by exploring alternatives before handing a blank check to on a everyday advance developments advance business.

    ReplyDelete
  2. Coach Outlet Online consists Coach Outlet Store Online,Coach Factory of dozens of black seed beads and, for the pattern, Porte Monnaie Chanel silver rod beads perfectly align Hollister Clothing Store with the Michael Kors Outlet,Michael Kors Factory Stores surrounding Bracelet hermes,sac chanel strands to Oakley Outlet,Oakley Sunglasses create Coach Factory the star shapes. The top is trimmed with Ray Ban Pas Cher leather, which gives it a tailored Toms Shoes,Toms Shoes Outlet Online finish.Giuseppe Zanotti But The North Face Outlet what I find most Ray Ban Sunglasses intriguing Oakley Outlet,Cheap Oakley Sunglasses is the rope drawstring closure. Ray Ban Sunglasses aviator Most Celine Handbags I see are made of leather, this is the first rope one I have Cheap Ray Ban Sunglasses seen Coach Handbags Outlet,Coach Bags,Coach Outlet in Ray Ban Sunglasses for men some Celine Handbags Outlet time. Ray-Ban Sunglasses In a way, this Valentino Wedges bag Valentino Boots feels very Ray Ban Outlet Store Online much like evening wear. Not necessarily black tie evening coach handbags 2015 sale wear, but I think Ray Ban Sunglasses for women the Saint Cheap Ray Ban Sunglasses 90% off Laurent Monogramme Sac Chanel Blanc Bourse Beaded Bag would Chi Flat Iron,Chi Hair Straightener pair True Religion Jeans,True Religion nicely Cheap Oakley Sunglasses with

    ReplyDelete
  3. Going afore that of benefitting the advances, you allegation to accomplish a afterwards appraisement allocation to the moneylender as acclimatized on time cast piece. On the off adventitious that, on the off aberrant that you are affable a colossal accumulated as age-old cast coulee on, accreditation will be acclimatized apprenticed and that too at appropriately low rates. Payday Loans

    ReplyDelete
  4. Even in a bound economy, accepting a accommodation to go to academy is absolutely possible. As a bulk of fact, it can assignment to a person's advantage to administer for a academy accommodation in a bound economy. Often, government action in ambiguous bread-and-butter times, makes applying for and accepting a accommodation to go to academy easier and faster than usual. Cash Advance

    ReplyDelete
  5. With a draft of dark on quality, you affliction to acquire the adaptation to ascertain credible adequate 'ol age-old affiliations alms the sorts of able money acclaim that you crave and thusly you can be able on your admission to administrate complete bouncer beforehand your abrupt money needs. car title loans online chicago

    ReplyDelete
  6. It is essential that you comprehend what it is you require with regards to your business. In the event that you require financing and you realize that you will require a ton of it, then the time has come to discover what your bank will require with the goal that you can get the credit you require and get your business up and running or extend it, if that is the thing that you are attempting to do. Cash Advance

    ReplyDelete
  7. There are many advantages to home change credits. You not just can get the cash you requirement for enhancing your current property, additionally these assets can be utilized to move, new development, extra cash for different things, and even simply redesigning. They are intended to help you enhance the estimation of the property it is being put into. Check Cashing San-diego

    ReplyDelete
  8. Are you seeking to ways to accrue global recognition promptly? You merely will need to Buy Facebook Followers to become recognized on world-wide-web. buy real and permanent facebook followers

    ReplyDelete