In the era of digitization, the financial landscape is evolving rapidly, and electronic mandates, commonly known as e-Mandates, have emerged as a convenient and secure way to authorize recurring payments.
What is e-Mandate?
An e-Mandate is an electronic authorization given by a bank account holder to allow another party, such as a service provider or a merchant, to automatically debit funds from their account for recurring transactions. It ensures a seamless payment experience, eliminating the need for manual intervention each time a payment is due. E-mandate was introduced by RBI and NPCI in 2018 to automate recurring payments without any intrusion required.
Different Types of E-mandates in India
- Bank E-Mandate: This type of e-Mandate allows individuals to authorize their banks to carry out specific transactions on their behalf. It can be used for recurring payments, bill payments, loan repayments, and more.
- Mutual Fund E-Mandate: As mentioned earlier, mutual fund e-Mandates enable investors to set up automated periodic investments in mutual fund schemes, such as systematic investment plans (SIPs).
- Insurance Premium E-Mandate: Insurance companies offer e-Mandates to policyholders to facilitate automatic premium payments for insurance policies, ensuring policy continuity.
- Utility Bill Payment E-Mandate: With utility bill payment e-Mandates, individuals can authorize service providers (e.g., electricity, water, gas) to automatically debit funds from their bank accounts for recurring bill payments.
- Loan Repayment E-Mandate: Financial institutions offer loan repayment e-Mandates, allowing borrowers to authorize automatic deductions from their bank accounts to repay their loans regularly.
- E-Commerce and Subscription E-Mandate: E-Mandates in e-commerce and subscription services enable seamless and automated payments for regular purchases or subscriptions.
- Tax Payment E-Mandate: Some tax authorities offer e-Mandates to facilitate automatic tax payments, making it easier for taxpayers to meet their tax obligations.
- Rent Payment E-Mandate: Landlords and tenants can use e-Mandates for rent payments, ensuring timely and hassle-free transactions.
- Charity and Donation E-Mandate: Donors can set up e-Mandates for charitable contributions, allowing automatic deductions for regular donations to their chosen charitable organizations.
- Investment Advisory E-Mandate: Investors can authorize their investment advisors to make investment decisions on their behalf through investment advisory e-Mandates.
What is an E-Mandate in Mutual Funds?
An e-Mandate in mutual funds refers to an electronic authorization given by an investor to enable recurring investments in mutual fund schemes. It allows investors to automate their periodic investments, such as systematic investment plans (SIPs), by giving consent to the mutual fund house to debit the specified amount from their bank account at regular intervals.
Advantages of E-mandate in mutual fund
- Convenient Setup: Investors can set up an e-Mandate through various channels, such as the mutual fund’s website, mobile application, or other authorized platforms. This eliminates the need for physical paperwork and simplifies the process.
- Flexible Frequency: Investors can choose the frequency of their investments, such as monthly, quarterly, or any other preferred interval, based on their financial goals and investment horizon.
- Automated Transactions: Once the e-Mandate is authorized, the mutual fund house will automatically debit the specified amount from the investor’s registered bank account on the chosen date, without requiring any further action from the investor.
- Secure and Reliable: e-Mandates are encrypted and adhere to strict security protocols, ensuring the safety of the investor’s financial information and transactions.
- Easy Management: Investors can modify the investment amount, frequency, or pause/resume the e-Mandate as per their convenience. This flexibility allows them to adapt their investments based on changing financial circumstances.
- Multiple Registrations: Investors can set up e-Mandates for multiple mutual fund schemes across different fund houses, making it easier to diversify their investments efficiently.
E-mandate Registration Process
The registration process for an e-Mandate involves the following steps:
- Choose the Service Provider: Select your service provider or merchant who offers e-Mandate facilities for the required service or subscription.
- Provide Consent: Grant explicit consent to the service provider to debit funds from your bank account for recurring transactions.
- Bank Account Details: Provide your bank account details, including the account number, IFSC code, and account holder’s name, to the service provider.
- Validation and Verification: The service provider, in collaboration with your bank, will validate and verify your bank account details.
- Authorization Confirmation: Upon successful validation, you will receive an authorization confirmation for the e-Mandate.
How to Check e-Mandate Status?
To check the status of your e-Mandate, follow these steps:
- Log in to your net banking or mobile banking application.
- Search for the “e-Mandate” or “Recurring Payments” section.
- Look for an option to view the status of your active e-Mandates.
- Select the e-Mandate you wish to check the status for, and the details will be displayed.
How to Cancel / Stop an e-Mandate?
To cancel an e-Mandate, follow these steps:
- Log in to your net banking or mobile banking application.
- Go to the “e-Mandate” or “Recurring Payments” section.
- Locate the e-Mandate you want to cancel and select the “Cancel” or “Deactivate” option.
- Confirm your decision to cancel the e-Mandate.
How to stop E-mandate in HDFC bank?
- Login to HDFC netbanking using your credentials
- Go to bill pay and recharge option
- Click on standing instructions
- Select view/stop scheduled bills to Cancel it.
Reach email@example.com to cancel your E NACH mandate.
How to stop E-madate in SBI Bank?
Follow below steps to learn how to cancel ECS mandate online.
- Visit the official website of SBI Mandate
- Sign up using your name and email address. Enter OTP shared with you in your email address.
- Provide your card details and give your consent for Rs. 2 transaction (Refundable) to complete the process.
- Now you can see a list of activated mandates on your card.
- Choose modify or stop to cancel any e-mandate.
Frequently Asked Questions (FAQs) on e-Mandate:
e-NACH, or Electronic National Automated Clearing House, is the framework that facilitates the processing of e-Mandates in India. It is an automated payment system that allows seamless, paperless, and recurrent electronic transactions.
A bank mandate is a directive given by an account holder to their bank, authorizing a third party to debit funds from their account for specific transactions. While an e-Mandate is an electronic form of this mandate, traditional bank mandates are often in written or physical form.
Yes, e-Mandates are encrypted and follow stringent security protocols to ensure the safety of your financial information.
While e-Mandates are commonly used for utility bill payments, subscriptions, and insurance premiums, their availability depends on the service provider.
The spending limits for e-Mandates can vary, and some service providers allow users to set specific spending caps.
Insufficient funds may lead to a failed e-Mandate transaction, and some banks may charge penalties for failed transactions.
Yes, you can usually modify the frequency or amount of an active e-Mandate through the service provider’s portal.
As of now, e-NACH is limited to domestic transactions within India.
The charges, if any, for setting up an e-Mandate may vary from one service provider to another.
Yes, you can revoke an e-Mandate whenever you wish to discontinue the recurring payments.
The activation time for an e-Mandate can vary but usually takes a few business days after successful validation.
e-Mandates are widely supported by most major banks in India, but it’s always good to check with your specific bank to confirm their support.
A ‘Link your bank account’ form is an authorisation you give your bank, which allows Scripbox to initiate transfer of funds to the mutual fund company in accordance with the investment instructions you place online.
This mechanism is used to automate your investments. This is highly recommended for all SIP investments.
If you are investing from the listed banks, then you can instantly link your bank account using internet banking.
If you do not wish to provide the bank linking form then you can invest via Net banking or UPI. You will get a reminder email 3 working days prior to the investment date which will have the option to invest via Net banking or UPI. Due to the Covid-19 outbreak, the turnaround time for completing the bank linking process is 20 days, from the day we receive the bank linking form.
Scripbox does not charge you any money for linking your bank account for automated transfers. However, your bank may levy a one-time fee for linking your bank account with Scripbox. This fee is determined by the bank.
Bank linking via Net Banking – You will be charged around Rs.2 to Rs.5.
Bank linking via paper form – It is different from one bank to another.
We recommend that you check with your bank regarding any fee for linking your bank account as policies can keep changing.
e-Mandates have revolutionized the way recurring payments are managed, offering convenience, security, and automation. With the ease of setting up and managing e-Mandates, individuals can now streamline their financial commitments efficiently. Always ensure you have a clear understanding of the terms and conditions before setting up an e-Mandate with any service provider.