Benefits of NACH
NACH has been introduced to serve all the stakeholders, and it is proving to be very useful. Benefits to stakeholder can be studied under three heads:
I. Benefits to Banks
1. Single Set of Rules: NACH has enabled operating and business compliance with different routing codes such as IFSC/MICR/INN codes for all banks in India, enables smooth interoperability.
2. Security Features: NACH provides best in class security features, cost efficiency and payment performance (STP) along with multi-level data validation facility accessible to all participants across the nation.
3. Economical: NACH framework is cost effective as it provides point-to-point infrastructure as the unified NPCI platform uses the network’s core banking infrastructure across India and provides faster and efficient way of exchange.
4. AADHAR Enabled: NACH Maintains a robust Aadhaar number mapping with Institution Identification Number (IIN) mapper with related governance mechanism and regulatory requirements.
5. Customisation: NACH Enables banks to design their own products as per there requirements through the service of NPCI.
6. Electronic Means: NACH facilitates paperless transactions and fast workflow, which eliminates manual intervention and all sorts of middleman ultimately helps to reduce the transaction time and design sustainable business processes.
II. Benefits to Customers
1. Eliminates Efforts: Less paperwork and an easy way to manage all the repetitive transactions such as Mutual Fund SIPs or insurance premium payments.
2. Safe: The procedure is secure and safe. It is a user-friendly facility with the feature of cancellation and easy access.
3. Dispute Redressal: NACH provides real time web based dispute redressal mechanism, which handles all the problems of customers related to the system and complaint disposal are done on real time basis, and customers can track there concerns.
4. Saves Time: Time saving and hassle-free as settlements takes one day.
5. Tracking of Payments: Customers can easily track there payments online, through the banking partner’s portal, they can use there credentials to login to the system and they can easily track the transactions and monitor the flow of the transaction.
III. Benefits to Organisation
1. Handles Huge Volume Transactions: Large repetitive transactions can be processed instantly and without the need for paper transmission across geographical distances.
2. Cost Effective: Low cost and low risk due to clear rules, compliance and process.
3. Fast Transaction Cycle: Improved transaction cycles for better goodwill and relationship management which enables fast and timely servicing of all financial commitments like Salaries, Bills payments, etc.
4. Eliminates Geographical Adversities: Using NACH there will be no delay due to geographies, as NACH is a centralised version of ECS, so there is no delay or halt due to different location or different geographies.
5. No Manual Interventions: Reduced the burden of processing manual debit requests.