Salary, pension, EMI rules changing; all you need to know
All important banking transactions such as salary, pension, and Equated Monthly Installment (EMI) payments will take place 24X7 from August 1. So, people will no longer have to wait for a working day for their salaries and pensions to be credited. This comes after the Reserve Bank of India issued fresh guidelines and changed the rules of the National Automated Clearing House (NACH).
What do the changes mean?
As per the new rules, payments such as salary and pension can be transferred on the weekends. At present, these services are available only when the banks are open, i.e., from Monday to Friday. Thus, even if the first day of the month falls on a weekend, people will not be required to wait for the next Monday for their salaries to be credited.
For customer convenience, NACH to be made available 24x7: RBI
This update came after RBI Governor Shaktikanta Das, during the bi-monthly monetary policy review, announced the 24x7 availability of NACH from August 1. "In order to further enhance customer convenience, and to leverage the 24x7 availability of real-time gross settlement (RTGS), NACH which is currently available on bank working days, is proposed to be made available on all days of the week," Das said.
What is NACH?
The NACH is a bulk payment system operated by the National Payments Corporation of India (NPCI) that facilitates one-to-many credit transfers such as payment of dividend, interest, salary, and pension. It also facilitates the collection of payments on electricity, telephone, water, gas, periodic installments toward loans, investments in mutual funds, and insurance premiums. It also helps in transferring government subsidies directly to beneficiaries.
NACH helped government in DBT during pandemic: RBI
The RBI has also termed NACH as a popular and prominent digital mode of Direct Benefit Transfer for beneficiaries. The apex bank said this payment system helped transfer government subsidies during the ongoing COVID-19 pandemic in a timely and transparent manner.