What Is The Full Form Of ECH In Banking?

ECH full form in banking is the Electronic Clearing House. ECH or Electronic Clearing House, is alternatively known as Electronic Clearing Service or ECS. Electronic money transfers, or ECH transfers, are typically made in large quantities. Funds that are periodic and repetitive are handled using this technique. Large organizations or institutions typically employ this kind of fund transfer for bulky transfers, such as salaries, interest, pensions, fees, dividends, and loan payments. Paying invoices and settling debts can also be done through the Electronic Clearing Service, or ECS, method.

Using this strategy, funds can be moved from one bank account to numerous others or from several bank accounts to a single one. Transactions processed through the National Automated Clearing House (NACH), run by the National Payments Corporation of India (NPCI), are also handled by the Electronic Clearing Service.

What Else Should You Know About ECH?

You must notify your bank, where you have an account, and issue a mandate enabling the organization to debit or credit funds via the bank to use the Electronic Clearing Service.

The two types of Clearing services are:

ECS Credit

Offering Electronic Clearing Service (ECS) credit to large recipients involves debiting the customer’s or user institution’s bank account. ECS credit covers contributions to pensions, salary, interest, and dividends, among other things.

ECS Debit

Large organizations or institutions utilize the Electronic Clearing Service (ECS) debit to raise payments to many customer accounts. These accounts may belong to investors, debtors, utility service consumers, or other groups.