Electronic Clearing Service


The Full form of ECS is Electronic Clearing Service. ECS is a service of transfer of funds from one bank account to another bank account through electronic mode. It also facilitates electronic debit/credit transaction associated with the customer’s account. It is usually used for transactions that are regular or periodic in nature. The Electronic Clearing Service (ECS) was introduced by the Reserve Bank of India (RBI) to provide a faster method for Repetitive and Periodic payment. An ECS service can be of two types i.e. ECS credit and ECS debit. In ECS credit, an institution makes a credit to your bank account, e.g. your salary, pension, dividends, incentives etc. So, a single account is debited periodically to credit multiple accounts. Whereas in ECS debit, you make payments as EMI for your loans, premium of policies, mutual funds etc. Some of the advantages of ECS are; it maximizes customer satisfaction, minimizes paper usage, no late payment charges incurred, it helps in timely payment of bills, it facilitates customers to pay their essential utility bills like electricity bills, mobile bills, internet bills etc., it also facilitates customers to pay for insurance premium, credit card payment, loan instalment, mutual funds etc.