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ECS — Electronic Clearing Service
ECS Full-Form refers to Electronic Clearing Service. ECS is the short fours of Electronic Clearing Service. This electronic payment or receipt mode is used for periodic or repetitive transactions. The institution that makes the collection of amounts in bulk, or makes bulk payment uses the ECS. This mode helps in facilitating the bulk money transfer from one account to many accounts and vice versa. ECS is of two types, ECS Debit and ECS Credit. An institution utilizes the ECS credit to afford credit to numerous beneficiary accounts. These beneficiary accounts are usually in bank branches comes under an ECS centre’s jurisdiction.
The crediting to these accounts is done by increasing one debit to the user institution’s bank account. The distribution of pension, interest, dividend salary etc can be done easily by using ECS. The credit payment of the ECS is initiated by the ECS credit user. This user must first make repetitive or bulk payment to numerous beneficiaries. But before doing this, it must register itself in an ECS centre. The user must also acquire the beneficiaries’ consent and obtain the particulars of their bank account before taking part in the credit scheme of ECS. The mandates must be given by the beneficiary accounts using the credit mechanism of this mode.
ECS can be utilized for transferring funds to the NRO and the NRE accounts in the nations that follow the Wire Transfer and FEMA guidelines. There are many benefits of using the ECS mode. The beneficiary is not required to visit the bank in order to deposit the paper instruments. He need not get apprehensive about the theft or loss of the physical instruments. ECS mode of transfer is highly cost-effective not only for the beneficiaries but also for the user institutes and the banking system. The funds are received by the beneficiaries right on the specified date.
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