Till Now Banks credits salaries, utilities, Bill payments on Bank working days i.e Monday to Friday. It is not possible to pay utility bills on weekends up to now. But Here’s a Great News for you!!.
India’s central Bank RBI has instructed all the banks to implement NACH(National Automated Clearing House)24/7, 365 days a year with effect from August 1st,2021.
What is NACH and it’s role in bill payments–
NACH stands for National Automated Clearing House which was operated by NPCI(National Payments Corporation of India). NACH is a one-time mandate given to Banks for debiting Bill payments (like Electricity Bill, Broadband Bill, Landline Bill, Water Bill, Mutual Fund SIP’s etc.)and utility bills(like LIC Premium, Health and Life Insurance premium’s etc).
If the customer gives a debit instruction to the bank to debit mentioned amount on a particular date, the bank debits the amount and credits to the concerned biller.
Till Now, NACH debit is effected on the bank working day. If the debit date is a public Holiday, the transaction would be processed on the next working day.
What has Changed Now?
With effect from August 1st, as per RBI directives, all bill payments including salary credits, Mutual Fund SIP’s, Credit Card Bills, Insurance Premium, Utility Payments are effected on the date mentioned during NACH Registration.
For Example- All salaried employees were credited their salaries on the 1st of every month(even it is a bank holiday)or as on the date instructed by the institution.
Is it Good or Bad?
It is beneficial for those who can’t wait for the bank working day to credit their salaries. It is also useful for mutual fund SIP debit even on a public holiday.
But be aware!! Maintain liquid cash in the bank a/c to process credit card bills, electricity bills, loan dues etc or otherwise some banks levy penalty for non-maintenance of sufficient cash in the bank a/c. There is a possibility of your CIBIL Score drop if you forgot to maintain cash in the bank a/c to repay loan dues.
So Keep in mind to maintain sufficient cash to repay loan dues, mutual fund sip’s at all-times to avoid penal fees beyond drop in cibil score.
Now NACH is active 24/7, 365 days. Do remember this and maintain sufficient cash!.