Full Form of ECS :
Electronic Clearing Service
ECS Full Form is Electronic Clearing Service. It refers to the electronic fund transfer between banks. It is used for paying bills, EMIs, and other investment payments. Institutions use them to pay salary, pension, dividend, interest, etc. ECS is used both for debit and credit purposes. Based on this, it is classified as ECS credit and ECS debit.
One can choose to fix the ECS amount or set a limit, which will be used for the automatic debit of the utility service bills. However, to start the ECS for a particular utility service such as a mobile bill, one must fill in ECS debit mandate. This has to be done with the mobile service provider and the bank might charge for the same.
ECS Full Form – Additional Information
One of the modes of electronic transfer of funds is Electronic Clearing Service, which will hereinafter be referred to as by its famously used abbreviated form ECS throughout the article. ECS is basically a transfer of funds from one bank account to another bank account. This mode of transfer is useful to those institutions or organizations for transacting payments for example distribution of salaries, dividends, pensions, and other related transactions. This mode is also beneficial in cases such as payment of bills, and other charges for example electricity, telephone, or water, or loans, etc. ECS is useful for debit as well as credit purposes.
ECS is a beneficial scheme, which has many benefits attributed to it. It secures payments and removes hassles which are generally attributed to a typical bank transaction. However, caution must always be exercised while choosing an ECS scheme. Thus, ECS is a capable and effective mode of fund transfer, which is currently in vogue. It has great relevance in the business industry and therefore, need greater elucidation. So, here are five points about ECS that everyone must know about:
Availing the ECS scheme
In order to avail the benefits of an ECS scheme, one must contact a select bank and provide for a mandate. This aforementioned mandate is very essential, as it comprises requisite information about the bank branch, details of the bank accounts, and others. It is the institution concerned to intimate information regarding the crediting or debiting of the amount to their account. The intimation must provide for important information such as date of debit or credit, the amount so credited or debited, and other necessary information. The customer shall be intimated through SMS services.
Types of ECS
This brings us to the categorization of ECS in two categories, namely: ECS Credit and ECS debit. The former is chosen when an institution has to credit a certain sum to your savings account. On the other side, the latter is chosen when the institution has to make recurring or periodic payments such as distribution of salary or dividends
Processing or Services charges
The Reserve Bank of India (abbreviated as RBI) has undertaken deregulation of the charges that sponsor banks levy from the institutions concerned. Such banks have been given directives to ensure ECS credit free of any service charge. Thus, the beneficiary needs to pay nothing in this regard.
Steps to discontinue the ECS scheme
The first head of the article already mentions the steps to avail an ECS scheme and this head shall discuss the contrary. In order to discontinue an ECS scheme, follow the following steps:
- A written communication has to be tendered by the beneficiary, the service provider, regarding the discontinuation of ECS services.
- The bank, which acts as the funnel for fund transfer, needs to be tendered a written application clearly stating that the ECS scheme should be discontinued.
These aforementioned steps are two simple steps and do not take much time.
Benefits from an ECS scheme
It is important to note the advantages ascribed to a typical ECS scheme.
- When one avails ECS debit scheme, he/she is able to easily make payments of all utility bills, which include mobile bills, telephone bills, electricity bills, credit cards, etc.
- One can even make payments regarding Mutual Fund, Loan installments, Insurance Premium, donations, and other relevant payments.
- ECS scheme saves paper, as it reduces the issuance of multiple cheques.
- ECS scheme ensures timely payment of bills, premium, or installments without the hassle of remembering the deadlines.
- There are no late payment charges as well.
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