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ECS (Debit Clearing) – Revocation of mandate by the customers

The volume of ECS transactions – both in Debit Clearing and Credit Clearing – has been growing rapidly. The growth rate of Debit Clearing transactions is much larger than the Credit Clearing and many utility companies have evinced a lot of interest in utilising the system for collection of utility bills.

To promote growth of ECS transactions, RBI in a circular dated 23rd Dec 2005, has asked banks to treat the withdrawal instructions of a customer equivalent to a ‘stop payment’ instruction in cheque clearing system. The customer can simultaneously send an instruction to the ‘user institution’ so that user institution stops including the transaction in the ECS file.

Thus, on the withdrawal instruction of a customer, it is not necessary for the bank branch to obtain a confirmation from the user institution.

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