Can you imagine a world where you cannot make recurring payments in an instant? No! Thanks to E-Mandate, convenience and fast payments have become an integral part of our lives. NPCI (National Payments Corporation of India) introduced this electronic payment system. This blog helps you understand the meaning of E-Mandate, how it works, its types, benefits, how to apply for it, and enable it – keep reading!
What is E-Mandate?
E-Mandate, short for electronic mandate, is a digital authorisation given by an individual to allow a service provider to deduct payments from their bank account on a recurring basis. It eliminates the need for physical paperwork and manual intervention, making it a more efficient and streamlined process. E-Mandate is used for recurring payments covering loan EMIs, utility bills, insurance premiums, subscriptions and more.
How Does E-Mandate Work?
To understand how E-Mandate works, let us take a look at the following steps:
- First, the individual consents to the service provider for recurring payments.
- Next, the service provider sends an E-Mandate request to the individual, outlining the payment details and terms.
- The individual reviews and approves the E-Mandate by digitally signing it or providing their consent through a secure online platform.
- Once the E-Mandate is authorised, the service provider initiates the payment transactions on the specified dates directly from the individual's bank account.
What Are the Types of E-Mandate?
Depending on the transaction, E-Mandate is categorised into two types:
1. Credit E-Mandate
Payments from other sources can get automatically credited to your account. This is especially helpful if you own a business. You can also use this to auto-credit any loan, monthly interest of Fixed Deposit, etc.
2. Debit E-Mandate
If you have a loan, have invested in mutual funds through SIPs, you must have used debit E-Mandate already! Here, an agreed amount gets automatically debited from your account. Debit E-Mandate is beneficial for making payments on time.
Also Read: NACH E-Mandate: Everything You Must Know About It
What Are the Advantages of E-Mandate?
The following points highlight the benefits of E-Mandate:
- Convenience:
E-Mandates offer a hassle-free way to authorise recurring payments, eliminating the need for manual intervention.
- Timely Payments:
With E-Mandates, your payments are deducted automatically on the designated due dates. This ensures timely settlements and avoids late fees or penalties.
- Security:
E-Mandates use encrypted channels and secure platforms, protecting personal and financial information during the authorisation process.
- Cost Savings:
E-Mandates reduce administrative costs associated with manual payment processing, such as printing and mailing physical documents.
- Flexibility:
E-Mandates provide the flexibility to set up recurring payments for various frequencies, payment amounts, and durations.
How to Apply for E-Mandate?
To apply for an E-Mandate, follow these general steps:
Step 1: Select a service provider that offers E-Mandate facilities for the desired recurring payment.
Step 2: Provide the necessary information and complete the application process.
Step 3: Review and authorise the E-Mandate by providing consent through the designated digital platform.
Once authorised, the service provider will start deducting payments from your bank account as per the agreed terms.
What is the Eligibility for the E-Mandate?
Before you start the E-Mandate process, make sure you meet the following eligibility criteria:
- You must have an Aadhaar Card.
- You must have a bank account with a bank that allows E-Mandates.
- Ensure that your chosen financial institution is registered to provide NACH (National Automated Clearing House) services.
- Your mobile number should be linked to both your Aadhaar Card and your bank account.
How to Enable E-Mandate?
To enable E-Mandate, you need to fill out an application form and furnish the required details. The specific steps may vary slightly based on the service provider or bank.
To Conclude
E-Mandate has helped simplify recurring payments by providing convenience, security, cost savings, and flexibility. Opting for E-Mandates ensures timely payments of your EMI on loans and streamlines financial obligations. For example, if you get a Personal Loan for additional financial support from Poonawalla Fincorp at attractive interest rates, you can set up debit E-Mandate to pay your monthly EMIs. This way, your loan journey becomes smooth and convenient.
Frequently Asked Questions
- What is the E-Mandate process?
The E-Mandate process involves electronically authorising a service provider to debit funds from your bank account for recurring payments. It typically involves providing your consent, and your bank account details, and signing an electronic mandate form.
- Does an E-Mandate cost money?
The cost associated with E-Mandate varies depending on the service provider or lending institution. Some may charge a nominal fee for setting up or processing E-Mandate, while others may offer it as a free service. It's best to check with your lender for any applicable charges.
- How do I cancel my E-Mandate?
To cancel your E-Mandate, you should contact your bank or financial institution and follow their specified process for revoking or cancelling the E-Mandate. This may involve submitting a written request, visiting a branch, or using online banking facilities.
- What is the maximum amount for an E-Mandate?
The maximum amount for E-Mandate transactions can vary depending on the policies and limits set by your financial institution. It's advisable to check with them directly for the specific maximum amount allowed for E-Mandate transactions.
