{"id":7154,"date":"2022-08-02T12:45:16","date_gmt":"2022-08-02T12:45:16","guid":{"rendered":"https:\/\/signdesk.com\/in\/?p=7154"},"modified":"2025-09-17T07:31:28","modified_gmt":"2025-09-17T13:01:28","slug":"e-mandate-for-recurring-payments","status":"publish","type":"post","link":"https:\/\/melento.ai\/en-in\/blog\/e-mandate-for-recurring-payments","title":{"rendered":"eNACH e-mandate for Recurring Payments – What Is It & How It Works"},"content":{"rendered":"

What is an e-mandate?\u00a0<\/b><\/span><\/h2>\n

An e-mandate is an electronic version of a mandate, which is a standing instruction (SI) given to a bank or NBFC to periodically debit a fixed amount from the account of the customer authorizing the mandate.<\/span><\/p>\n

e-mandates<\/strong> are useful tools to enable recurring payments and one time payments alike, and are used for a variety of reasons. Recurring payments for OTT subscriptions, utility bills, loan EMIs, insurance premiums, mutual fund investments, and subscriptions to gaming platforms all involve e-mandates in some form.\u00a0<\/span><\/span><\/p>\n

Typically, mandates are issued via documents. These are called physical mandates and they\u2019re created when a mandate form is filled and submitted by a client to NPCI. The mandate information in the form is then verified by the bank where the customer holds their account, commonly called the destination bank. The mandate is then verified in 15-20 days and the recurring debits can begin. A Unique Mandate Registration Number or UMRN is also created for every mandate registered, to help keep track of debits and credits.<\/span><\/p>\n

However, with a success rate of just 30-40%, paper mandates often don\u2019t get the job done and are a major source of friction in payment collection. e-mandates are an improved, digital alternative to physical mandates both due to their high success rate (80-95%) and their ease of usage.<\/span><\/p>\n

Who clears recurring NACH debits?<\/b><\/span><\/h2>\n

Whenever there\u2019s a debit within the formal banking sector, the details of this debit usually need to be approved and cleared by a system that keeps track of all the transfers being made. This is done for due diligence purposes and to keep the entire system running smoothly.<\/span><\/p>\n

Previously, the Reserve Bank of India( RBI) handled NACH debits through their local clearing centers now called Legacy Electronic Clearing System<\/a> or Legacy ECS. These were quickly merged by the National Payments Corporation of India<\/a> (NPCI) into a single unit that\u2019s referred to as the National Automated Clearinghouse or NACH.<\/span><\/p>\n

e-mandates are built on the infrastructure of the National Automated Clearinghouse or NACH.<\/span><\/p>\n

Therefore, all e-mandates are cleared by this entity.<\/span><\/p>\n

Recently, NPCI upgraded the NACH infrastructure to what is called eNACH (Electronic NACH).<\/span><\/p>\n

eNACH<\/a><\/strong> consolidated the frameworks used by several e-mandate providers and created a unified clearinghouse capable of integrating with any bank in the country and clearing the NACH debits registered with these banks.<\/span><\/p>\n

With the present eNACH framework, e-mandates can be registered in real-time using APIs or within 1-2 days using Aadhaar eSignatures.<\/span><\/p>\n

How is eNACH different from e-mandate?<\/b><\/span><\/h2>\n

As mentioned previously, eNACH is the infrastructure on which recurring payments occur. e-mandates, on the other hand, are the instructions that govern these recurring payments.<\/span><\/p>\n

To put it simply, think of a piece of software code. The code itself is an instruction for the system to perform certain tasks, but these tasks can only be performed on the software infrastructure of the system. In this example, the code is the e-mandate and the software is eNACH.<\/span><\/p>\n

Therefore, e-mandates and eNACH are inseparable in that the former requires the latter to work and the latter is built to run the former.<\/span><\/p>\n

What is eNACH e-mandate?<\/b><\/span><\/h2>\n

eNACH e-mandates<\/strong><\/a> are e-mandates that utilize eNACH for recurring payments. eNACH e-mandates are completely digital and can be created, registered and managed online via an eNACH e-mandate service provider.\u00a0<\/span><\/span><\/p>\n

The process of registering an e-mandate is exceedingly simple. While e-mandates can still be registered manually by submitting a mandate form, most e-mandates are registered online.<\/span><\/p>\n

The information collected when registering a mandate includes –<\/span><\/p>\n

    \n
  1. \n
      \n
    1. Personal information<\/b> – The customer\u2019s name, mobile number and email address\u00a0<\/span><\/span><\/li>\n
    2. Mandate details<\/b> – The mandate variant of choice, the frequency of debits, and whether the amount if fixed or varying<\/span><\/span><\/li>\n
    3. Bank details<\/b> – The customer\u2019s personal bank details<\/span><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

      The process of registering a mandate depends on the e-mandate variant chosen by the customer or the bank.<\/span><\/p>\n

      Broadly, there are three types of mandates, also called mandate variants.<\/span><\/p>\n

      Types of Mandates\u00a0<\/b><\/span><\/h2>\n

      Mandate variants are distinguished based on how they\u2019re registered. Here are the various types of mandates.<\/span><\/p>\n

      \"types<\/p>\n