GeneralFinancial Glossary
NACH (National Automated Clearing House)
Definition
A centralized clearing system operated by NPCI for processing bulk recurring payments like SIPs, insurance premiums, EMIs, and utility bills. A NACH mandate is a one-time authorization given to your bank to automatically debit specified amounts on specified dates. Registration takes 15-25 days.
Why It Matters
NACH is the backbone of automated financial transactions in India. Setting up NACH mandates for all recurring payments — SIPs, insurance premiums, EMIs — ensures you never miss a payment due to forgetfulness. The long registration period is its main drawback, which is why UPI Autopay is now preferred for new SIP setups.