NACH speeds SIP registration time to 10 days

NACH will cut down the SIP registration time from the current 30 days to a mere 10 days. As per a decision taken by the mutual fund industry, from March ECS (electronic clearing service) mandates used for doing Systematic Investment Plan (SIP) will be replaced by NACH ( National Automated Clearing House) a new system of clearing. National Payments Corporation of India (NPCI) has implemented NACH. All new mutual fund SIPs will have to be registered using NACH.

As per distributors, NACH is a one time registration process which allows an investor to do lumpsum / SIP investments in mutual funds. By registering this mandate, you will authorise the relevant bank (which is registered in your Folio) to debit a certain maximum amount per day, as per your choice (Say, upto Rs 100,000/- per day or even less) towards investment in a mutual fund scheme of the fund house. This mandate can either be given for a fixed period (say 1 year) or perpetual till you cancel it. One mandate works for one folio in the fund house. If you have SIPs in different fund houses, you have to fill separate NACH forms.

Once this mandate is registered an investor can invest offline without having to write a cheque or transferring money online via a payment gateway. Investors can make use of this payment mode for their Lump-sum Mutual Fund investments apart from SIPs in the same folio with the fundhouse. Realisation of funds from the investors account happens on T day which helps investors track their payments on time. Your existing SIPs will continue to run till the time you have given an ECS mandate. Once the tenure or the current ECS mandate ends, if you wish to renew the SIP, you will have to fill in a NACH form, for the same.