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EMI Cheques No Longer Acceptable in ECS Locations
If you have issued Post Dated Cheques or EMI cheques for your loan repayment you might soon be asked to provide ECS Debit mandate instead. All banks have been asked by RBI to switch to the ECS mode of collecting payments where the facility is available.
ECS, which stands for Electronic Clearing Service, is the electronic mode of making or receiving payments between bank accounts. ECS is used when payments are repetitive and periodic, like in an EMI or mutual fund SIP. Similar to penalty levied in EMI cheque dishonor, ECS debit would also attract penalty in case of insufficient funds in your account.
ECS Debit facility is available in most bank branches under Core Banking System (CBS). So, most banks in the urban and semi-urban locations would have ECS facility. Where ECS facility is not available, lenders are allowed to accept CTS-2010 standard cheques for EMIs.