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Few points for using Electronic Clearing Service (ECS) effectively

Few points for using Electronic Clearing Service (ECS) effectively
Electronic Clearing Service offered by banks for facilitating transfer of funds from one account to the other that is to be executed on a regular basis for either debit or credit purposes needs to be used with diligence to make the most of the offering. To know more about ECS click here.

The facility has done away with the need to write cheques again and again for some transactions that have to be effected on a recurrent basis. The service also ensures that the due payment is paid well within the due date as the concerned individual making use of the facility fixes a certain date considering liquidity and other constraints.

The facility also allows an individual to cap the payment limit to some specified value and in the case when the bill falling due for some service falls below the set cap, the ECS debit for the bill amount shall be effected.

Procedure to avail and terminate the service in respect of some specific merchant transaction or investment or towards Loan EMI

To avail of the ECS service for tendering payment towards some specific service, you need to fill up the proforma available for the ECS debit mandate with the service provider and get the same acknowledged and endsored by the financial institution.

Similarly for termination of the ECS debit facility towards a particular service provider or against a loan account, you need to intimate the banking authority much in advance, so that the institution carries out the necessary formalities well in time and the amount is not debited against the account.

Other precautions to take care of

To ensure that your ECS transaction is honoured, you need to ensure that the balance against the specified transaction is maintained in the account. Else, ECS mandate i.e. similar to cheque issuance will result in the levy of charges on account of the dishonoured transaction. The charges correspond to the penalty levied in case of cheque bounce.


A facility of running ECS debit again at a later date in case of non-maintenance of the required amount can be offered by the bank at its own discretion.

Though, ECS mandate availed by you will undoubtedly make your work less cumbersome you need to cross check and verify the debits in its respect from your bank account on a regular basis. Any discrepancy has to be reported at the earliest for banks to take required course.

Story first published: Friday, January 17, 2014, 14:17 [IST]
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