What is the full form of ECS?

The full form of ECS is Electronic Clearing Service. ECS is an electronic mode scheme that allows monies to be transferred from one bank account to another, allowing for electronic credit or debit transactions to be linked to the client’s account. It is typically used for periodic, regular, or transactional purposes.

Types of ECS

The Reserve Bank of India (RBI) introduced ECS in India to provide a quick method for both routine and periodic payments. There are two types of ECS services.

• ECS Debit – A person makes an EMI payment for loans, mutual funds, policy primes, and so on.
• ECS Credit – A person’s bank account is credited by an organisation or entity. Wage credit, dividends, pensions, incentives, and so on.

Benefits of ECS

• ECS strengthens customer ties.
• ECS lowers the use of paper.
• ECS does not impose late payment penalties.
• It appears to aid in the prompt payment of bills.
• ECS improves client payment of vital utility bills such as power bills, phone bills, internet bills, and so on.
• It also allows for the payment of insurance premiums, loan payments, credit card payments, mutual funds, and so on.

How do you make use of an ECS scheme?

• Individuals must notify their bank and provide an authorising mandate to the organisation, which can subsequently credit or debit the transactions through the bank.
• The mandate comprises branch and account information.
• It is the obligation of the institution to provide information regarding the amount to be debited or credited to this account, including the credit date and other transactional details.
• Individuals will be notified when money has been deducted from their accounts via cellphone notifications or SMS.
• The ECS consumer can specify the maximum amount deductible from the bank, the reason for the debit, and the validity duration for each mandate submitted.