BANKING AFFAIRS

Detailed explanation-1: -ECS is used by institutions for making bulk payment of amounts towards distribution of dividend, interest, salary, pension, etc., or for bulk collection of amounts towards telephone / electricity / water dues, cess / tax collections, loan instalment repayments, periodic investments in mutual funds, etc.

Detailed explanation-2: -The Electronic Clearance Service (ECS) scheme provides an alternative method of effecting bulk payment transactions like periodic (monthly/ quarterly/ half-yearly/ yearly) payments of interest/ salary/ pension/ commission/ dividend/ refund by Banks/Companies /Corporations /Government Departments.

Detailed explanation-3: -Electronic Clearing System (ECS) is an electronic method of fund transfer from one bank account to another. It is generally used for bulk transfers performed by institutions for making payments like dividend, interest, salary, pension, etc.

Detailed explanation-4: -Essentially, ECS facilitates bulk transfer of monies from one bank account to many bank accounts or vice versa. ECS includes transactions processed under National Automated Clearing House (NACH) operated by National Payments Corporation of India (NPCI).

Detailed explanation-5: -What is the ECS Mandate? Electronic Clearance Service (ECS) is an electronic mode of transferring funds from one bank account to another. Financial institutions use it to make payments such as salaries, pensions, dividend interest and deduction of EMIs for loans.