Effective August 1, all bulk payments such as salaries, dividends, pensions and others will now go through even on Sunday and other bank holidays. This comes after Reserve Bank of India Governor Shaktikanta Das announced that the National Automated Clearing House (NACH) will be operational on all days of the week from August 1 throughout the year. This effectively means that people can get their salaries and EMIs and other automatic payments will be deducted on Sunday or on bank holidays. Currently, the system is operational only on days that banks function.
NACH is a bulk payment system operated by the National Payments Council of India, and facilitates one-to-many credit transfers such as payment of dividend, interest, salary, pension, etc. It also facilitates the collection of payments of utilities such as electricity, gas, telephone, water, as well as periodic instalments towards loans, investments in mutual funds, insurance premium, etc. It is due to standing instructions with NACH that money is deducted automatically.
“NACH has emerged as a popular and prominent mode of direct benefit transfer (DBT) to a large number of beneficiaries. This has helped transfer government subsidies during the present COVID-19 in a timely and transparent manner. In order to further enhance customer convenience, and to leverage the 24x7 availability of RTGS, NACH, which is currently available on bank working days, is proposed to be made available on all days of the week effective from August 1, 2021,” the RBI Governor announced on Friday, June 4, at a bi-monthly monetary policy meeting.
The move comes after both the NEFT and RTGS were made functional on all hours of all days. April’s retail payment data of the NPCI had shown that the bounce rate on these auto-debit transactions under NACH had risen, at 34.05%. The worst bounce rate was in June last year after it was on a declining trend.
NACH being functional on all days is important for those who have standing instructions towards their EMIs, payments for mutual funds and more, as they wouldn’t go through if that day was a holiday or a Sunday. While your salary will now get credited on these days as well, not having money in the account to pay for these standing instructions could lead to penalties. Customers should keep an eye on their account balance to ensure that their account has enough to go towards these payments.