In this article, you will get all the details about one of the outstanding payment system i.e. ECS, its type and where it is applicable.ECS Stands for Electronic Clearing Service. It is completely monitored and electronic system known as the part of the payment system with different mechanism and functions. It is applicable when there is a need for large no of individual's transaction or one account to many transactions.
For example, company transfer salaries into their employees account and subsidiary transfer of LPG. This system is used when there is a need for high transactions simultaneously or repetitive including weekly / monthly / yearly / quarterly payments of refunds/commission/pension/interest by various government departments/corporations/companies/banks.
Categories of ECS
On behalf of the Banks, ECS is divided into two categories
When an organization makes credit to employee's bank account for their salary. Credit in multiple accounts through a single account.
When we are clearing loans from financier for doing payments through EMI, premiums, mutual funds.
A procedure for getting the ECS scheme:
a) First, inform your bank Authorities of the specific branch, where you're your saving balance detail is maintained.
b) Provide your mandate information including branch and accounts.
c) Submit an ECS Mandate to allow them to deduct the amount of loan
d) Copy of the ECS mandate is submitted at a federal bank branch.
e) The federal bank will receive loans installments through ECS.
Benefits of ECS
a) Minimize paper usage and increase customer satisfaction
b) Ontime bill payment without any delay.
c) On can effortlessly pay their utility bills including mobile, loan installments, telephone, credit cards mutual funds and electricity etc.
d) This service is applicable to bulk payment making.
f) It is the fastest way for periodic payment.