E-Nach and E-Mandates : Meaning, Benefits, and How it Works

Understanding eNACH Mandates: Meaning, Benefits, and How it Works

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Understanding eNACH Mandates: Meaning, Benefits, and How it Works

3 min 03 Apr 2025

Highlights:

What is eNACH?
How do eNACH Mandates work?
What is an e-Mandates and how is different from an eNACH Mandate?

Managing recurring payments efficiently is essential for borrowers and businesses, and eNACH mandates can simplify the process by enabling automated transactions. However, it is easy to get confused about eNACH, and how it is different from an e-Mandate.

This guide explains eNACH registration, its benefits, and the difference between

What is eNACH?

eNACH or Electronic National Automated Clearing House, is an automated payment system introduced by the National Payments Corporation of India (NPCI) to allow financial institutions the ability to process recurring payments such as loan EMIs, utility bills, and insurance premiums digitally. There are several advantages of making payments through eNACH mandates, such as:

The elimination of physical paperwork
The facilitation of quick and seamless transactions
The regulations by NPCI that ensure secure transactions

Even you, as an individual borrower can benefit immensely through:

Hassle-free payments: No need for making manual payments every month
Lowered risk of missing payments: By automating your payments, you’re less likely to miss repayment commitments

How do eNACH Mandates work?

An eNACH mandate is essentially the digital authorisation given by the borrower, or the customer to their lender or service provider. Once registered, it allows automated debit of recurring payments from the authorised bank account. Here is how one typically sets up an eNACH mandate:

Customer initiates request: The borrower applies for an eNACH registration with their lender.
Bank authorisation: The borrower’s bank verifies and processes the request.
Mandate approval: Upon successful verification, the eNACH mandate is activated.
Automated debit: The lender can now auto-debit loan EMIs or other approved payments from the borrower’s account.

What is an e-Mandates and how is different from an eNACH Mandate?

On the other hand, borrowers can also authorise an e-Mandate as a digital standing instruction, to allow automatic debits from their accounts. While both eNACH and e-Mandate facilitate automated payments, they operate through different systems and have distinct approval processes.

Feature	eNACH	e-Mandate
Regulating Body	NPCI (National Payments Corporation of India)	RBI (Reserve Bank of India)
Purpose	Automates recurring payments for loans, insurance, subscriptions, etc.	Used for standing instructions on bank accounts for auto-debit transactions.
Authentication	Requires customer authentication via net banking, debit card, or Aadhaar-based OTP.	Typically authorised by customers via net banking or debit card.
Approval Time	Takes 2–3 working days to process and activate.	Generally approved instantly upon successful authentication.
Paperwork	No physical paperwork required. Fully digital process.	Similarly, fully digital; no paperwork required.
Use Case	Commonly used for loan EMIs, credit card bill payments, and subscription-based payments.	Used for savings accounts, investments, mutual fund SIPs, and credit card auto-payments.

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