Laxman: Do cheques clear on non-working days? I am in need of money to make further payments.
Ram: Yes, I have heard recently that now banks will clear cheques on non-working days and in holidays as well. NACH will be operational 24 hours a day. With the new The RBI governor, Shaktianta Das, made this announcement on June 4, 2021 during the central bank’s bi-monthly monetary policy announcement. As per the RBI governor, this decision has been taken to enhance customer convenience.
Laxman: What is NACH?
Ram: NACH (National Automated Clearing House ) is a bulk payment system operated by NPCI which facilitates one-to-many credit transfers.
Once the NACH instructions are given to a bank, fund house or a biller like a mobile service provider, the customer is not required to issue cheques every month. Just like an ECS mandate given to the bank, in the NACH facility, the money is automatically deducted from the customer’s account depending on the instructions given.
Laxman: What is the criteria for that?
Ram: You will need to keep a minimum balance in your bank account at all times. With the new rules changes, cheques can be penalized if they bounce. So maintaining a minimum bank balance is crucial.
Laxman: Will you please elaborate?
Ram:The Reserve Bank of India (RBI) came out with a new set of guidelines that took effect from August 1, regarding changes to the banking rules. With the new change, the central bank has put it forth that the (NACH) will be operational 24 hours a day. With the new rule change, cheques can be cleared on a Sundays too. The new rules mean that citizens will no longer have to wait for the holiday to finish to pay these bills and can do so whenever they choose or at the earliest possible convenience.
NACH is currently available only on the days when banks are functional. In the interest of customer convenience, and to take advantage of the availability of RTGS on all days of the year, it is proposed to make available NACH on all days of the week throughout the year, effective 01 August 2021.
Laxman: I have my account in private bank. Will this rule also be applicable to all private banks?
Ram: Yes, this change will be implemented in all National and Private Banks. It opens up a wider venue in terms of facilities. NACH facilitates various types of transactions such as salaries, pensions, interest, dividends and so on. Additionally, it also acts as a facility through which the average citizen can pay their various bills such as those for water, electricity, gas, phone bills, loan EMI, mutual fund investments, insurance premiums and so on. This does have the added advantage of being a less time-consuming process.
Laxman: Thank you for sharing this very important and day to day practical information.