What is e-mandate?

The need for convenience and automation in financial management has become paramount in the rapidly evolving digital era. e-Mandates, an innovative digital payment solution, have transformed the handling of recurring payments in India. This system was launched by the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) and has greatly simplified the payment process.

e-Mandate meaning

An e-mandate in banking is a digital payment service that allows individuals and businesses to authorise recurring payments directly from their bank accounts. The RBI and NPCI facilitate this service, enabling automatic deductions for payments like loan installments, subscription services and utility bills. By providing standing instructions in a digital format, e-mandates eliminate the need for physical paperwork, making the process faster and more efficient.

Benefits of e-mandate

Greater flexibility

With e-mandates, you can easily set up recurring payments for various services such as loans, subscriptions and utility bills. This system allows you to ensure payments are made on time, removing the need for manual interventions.

Effortless online processing

The digital nature of e-mandates makes setting up and managing recurring payments a breeze. You can quickly register and manage your e-mandates using your bank’s internet banking portal or mobile app, streamlining the process.

Secure transactions

e-Mandates offer a secure method for handling recurring payments. The process requires authentication through your net banking credentials or Debit Card details, ensuring all transactions are authorised and protected from fraud.

Efficient payment organisation

By using e-mandates, you can keep all your recurring payments organised effectively. This system helps you avoid the hassle of remembering due dates and reduces the risk of incurring late fees, making your payment experience smooth and trouble-free.

Increased transparency

e-Mandates improve transparency by providing comprehensive records of all transactions. You can easily monitor your payments through bank statements, ensuring your financial management is clear and accurate.

Also Read: What is digital payment? - Overview, methods & benefits

How do e-mandates work?

1. Consent: You give your permission to the recipient to start automatic deductions from your bank account. This can be done by filling out an e-mandate form on the recipient's website or app.

2. Authentication: You verify the e-mandate using your net banking credentials, Debit Card details or other authentication methods provided by your bank.

3. Validation: The NPCI verifies the e-mandate and sends it to your bank for processing.

4. Setup: Your bank establishes a recurring payment instruction, allowing the recipient to deduct payments on the scheduled date automatically.

5. Cancellation: You can cancel the e-mandate anytime by contacting your bank or the recipient. The NPCI will mediate to resolve any issues that may arise.

Eligibility for e-mandate

• You must have a bank account with a financial institution.
• An Aadhaar Card is necessary.
• Your mobile number should be linked to your bank account and Aadhaar Card.

e-Mandate registration process

1. Access the net banking website or mobile banking application.
2. Complete the e-mandate form on the service provider’s website or app.
3. Authenticate the form using net banking credentials, Debit Card details, or other methods.
4. The bank verifies the e-mandate and sets the recurring payment instructions.

Types of e-mandates

• Credit mandate: This instruction allows a fixed or variable sum to be deducted from your Credit Card. The maximum limit for a single transaction through a Cedit Card e-mandate is ₹1,00,0001, which applies to specific categories such as Mutual Funds, Insurance premiums and Credit Card bill payments.
• Debit mandate: This mandate authorises withdrawing a fixed or variable amount from your bank account. The maximum limit for a single transaction through a Debit Card e-mandate is ₹15,000.

Conclusion

e-Mandates have transformed how recurring payments are handled, offering convenience, security and efficiency. By understanding the process and benefits of e-mandates, you can take full advantage of this digital payment service to manage your finances better.

Axis Bank's eNACH and physical NACH mandate registration services streamline this process, ensuring that your recurring payments are easily managed and secure. Start utilising Axis Bank's Cash Management Services today and experience seamless financial management in 2-3 working days!

FAQs

How can I check my e-mandate?

You can check your e-mandate status by logging into your internet banking portal or mobile banking application and navigating to the e-mandate section.

What is the limit of e-mandate on a Debit Card?

The limit for a single transaction via Debit Card e-mandate is typically set at ₹15,000.

What is the limit of e-mandates that I can set up through a single bank account?

The number of e-mandates you can set up depends on your bank's policies. Each bank may have different limits for e-commerce transactions using various payment options.

What happens to e-mandates if the bank account has an insufficient balance?

If your bank account has an insufficient balance, the e-mandate transaction may fail. You might also be charged a penalty, depending on your bank's policies.

it possible to set up an e-mandate as an option for collecting recurring payments?

Yes, e-mandates are an excellent option for collecting recurring payments. Businesses can use e-mandates to automate the collection of payments for subscriptions, loans, utilities, and more.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.