Session 168 - (Freshers ) - NACH (National Automated Clearing House)

Like BACS in UK we have NACH In INDIA.

National Automated Clearing House (NACH) is a system developed by the National Payments Corporation of India (NPCI) for banks. This system can be used to make bulk transactions towards distribution of subsidies, dividends, salaries, pension, etc. Bulky interbank transactions which are repetitive and periodic in nature are facilitated by this National Automated Clearing House or NACH. The NACH system can also be used for collection of payments like the water bill, telephone bill, electricity bill, loans,?insurance?premium payments, investments, etc.

Benefits of NACH

The National Automated Clearing House or NACH system makes it easier for those who make large transactions frequently. This system benefits the bank, its customers and also?business?organisations that engage in such transactions as frequently as on a monthly basis. The different benefits offered by the national automated house or NACH system are as follows:

Benefits to the Banks:

Banks can offer a much better?customer?service by providing faster payment processing and creating stronger ties with the associated organisations.

Collection of EMI, loans, premiums and other payments becomes a lot easier and quicker with this system. This is because there is no longer a need to rely on the traditional checks or paperwork.

The?workflow?is much smoother and errors are limited as there are no manual processes involved.

All the transactions are much quicker and take very less time to complete as compared to before.

Benefits to Large organisations

Large business organisations do not have to depend on cheques for clearance.

There is no need to keep track of due dates for payments manually as they are automatically registered.

Salaries, dividends, pension payments and other payments are made on time without any delay which makes the whole process a lot more efficient.

Larger payments like allowances and scholarships take less time to process.

Even the large business organisations and companies can offer a much improved?customer service?and faster bill payments.

Benefits to the Customers

The customers also have no need to undertake any manual processes in these transactions.

The entire transaction process is a lot easier, efficient and faster than before.

The customers do not need to keep track of the due dates for payments like utility bills,?credit card?bills,?interest?payments, phone bills, electricity bills, and various other payments that are made on a repetitive and periodic basis. This is because all these are automatically handled through the registered banks.

NACHA FORMAT ACH Input File Structure The NACHA format is composed of 94 character records. All records and fields are required, except the record 7 - Entry Detail Addenda Record that is optional. Record Title Record Type Code File Header Record - This record includes your company name and company number. It also designates the immediate destination (LaSalle Bank N.A. or Standard Federal Bank) of the entries contained within the file. 1 Batch Header Record - This record indicates the effective entry date (the date you request the deposits/debits to be settled). In addition, this record identifies your company and provides an entry description for the credit and debits in this batch. 5 Entry Detail Record - This record contains the information necessary to post a deposit to/withdrawal from an account, such as recipient’s name, account number, dollar amount of the payment. 6 Entry Detail Addenda Record - This record is optional. This record contains additional information relating to the prior entry detail record. It is primarily used for CCD+ and CTX, which are corporate to corporate transactions. 7 Batch Control Total - This record appears at the end of each batch and contains totals for the batch. 8 File Control Record - This record provides a final check on the data submitted. It contains block and batch count(s) and totals for each type of entry

The basic record layout for ACH files is detailed below:

File Header Record Batch Header Record

First Entr y Detail Record

Second Entr y Detail Record :

Last Entr y Detail Record

Batch Control Record

Batch Header Record

First Entr y Detail Record

Last Entr y Detail Record

Batch Control Record File Control Record

https://www.youtube.com/watch?v=gFVIkyQ1bxM&embeds_euri=https%3A%2F%2Fwww.npci.org.in%2F&feature=emb_imp_woyt

https://media.licdn.com/dms/document/C4D1FAQF7d-KyghdzIA/feedshare-document-pdf-analyzed/0/1679891828952?e=1680739200&v=beta&t=3Bqc6T8gGXXpD1_Byeqqx-h64sFHIaQFPMVfncuMI_Y