NBFCs seek simpler methods for cancellation of NACH mandate
   Date :04-Apr-2021

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Business Bureau :
NBFCs with asset base of below Rs 500 crore have requested the National Payments Corporation of India (NPCI) to provide a simpler method such as WhatsApp or SMS for cancellation of NACH mandate for their customers. National Automated Clearing House (NACH) mandate is a direction to the bank to honour recurring payments like loan instalments, insurance or systematic investment plans (SIPs).
In order to facilitate online submission of customer requests for mandate cancellation, NPCI has asked banks, NBFCs and corporates to provide an option to the customers to submit the cancellation/stop request through their website or any other electronic channels. In a letter to NPCI, Finance Industry Development Council (FIDC), a representative body of non-banking finance companies (NBFCs), said many of these smaller NBCFs do not have well-developed websites and customers are also not so tech savvy. It requested NPCI to provide “cancellation facility (for NACH) through simpler means such as Whatsapp/SMS in a secure manner such that customers could be encouraged to adopt those simpler means rather than access the companies websites to carry out such a request.”
The industry body urged NPCI to allow these NBFCs to provide cancellation facilities on a ‘best effort’ basis and not as a mandate. It said most of the customers of smaller NBFCs are not tech-savvy and are not comfortable with transacting on electronic platforms but they may be comfortable in using SMS or WhatsApp.