Full Form of ECS | ECS Full Form | What is ECS | About ECS
Full Form of ECS is Electronic Clearing Service: ECS stands for Electronic Clearing Service. It’s an electronic mode of funds transfer from one bank account to a different bank account. It additionally facilitates electronic credit/debit dealing related to customer’s account. It’s typically used for transactions that are repetitive or periodic in nature. The Electronic Clearing Service was introduced by the reserve bank of India to produce a quicker technique for Periodic and Repetitive payment.
You have to inform your bank and supply a mandate for the bank to authorize the institution, which may then debit or credit the payments through the bank. The mandate includes the details of your bank branch and account info. Salaried persons and staff of government or personal companies, who have a salary account, will contact bank authorities and sign for ECS.
An ECS service is often of 2 types as follows:
ECS credit: in this ECS, an institution makes a credit to your bank account, e.g. your dividends, salary etc. So, one account is debited sporadically to credit multiple accounts.
ECS debit: in this ECS, you create payments as EMI for your loans, mutual funds, premium of policies etc.
According to Wikipedia:
In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled. Clearing of payments is necessary to turn the promise of payment (for example, in the form of a cheque or electronic payment request) into the actual movement of money from one account to another. Clearing houses were formed to facilitate such transactions among banks.
Maximize client satisfaction
Minimize paper usage
No late payment charges
Timely payment of bills
Facilitate customers to pay their essential utility bills like electricity bills, mobile bills, phone bills etc.
It additionally facilitates customers to procure mutual funds, premium, mastercard payment, loan installment etc. from this service.