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NACH Full Form – Know the Full Form of NACH in Banking


Earlier people used to visit the respective office or bank to make payments of their bills and other expenses. Sometimes it also happened that they used to forget the due date on which they have to pay their EMI or bills. But when the NACH facility was introduced, it has made the various payments convenient for the customers. NACH full form is the National Automated Clearing House facility and the National Payments Corporation of India has introduced this facility. Many Financial Institutions, Banks, and Corporations use this facility to do the repeated and periodic transactions. In other words, NACH Payment is basically the standing instruction given to the bank to debit a certain amount of money from their account on a specific due date.

Features and Benefits of NACH Facility

Here are some of the benefits of this payment system that is mainly used to collect payments in bulk. It can be of bills like electricity bills, telephone bills, water bills, Mutual Funds Investments, loan EMIs, and insurance premium payments. Even some institution uses this facility to distribute dividends, salary, pension, subsidies, and interests.

  • National Automated Clearing House Payment system is an automated process and there is no involvement of any manual process.
  • This payment system is fast and it saves time for both the bank and the customer.
  • There is no need for monitoring your payments like credit card bills, phone bills, utility bills, and others because all of them can be managed by the institution itself and they debit the payment timely.
  • There is no dependency of banks on other banks for the cheque clearing because they automatically debit the payment from the Payee’s account.
  • All the payments or debit take less time to get processed.
  • The payment of pensions, salaries, and dividends are distributed on the specified dates without any delay.
  • The NACH Facility has improved customer service.
  • One can authenticate the NACH facility online and there is no need for the paperwork.
  • The banks can also collect the payments through this facility without doing any paperwork.
  • There are fewer chances of errors in this facility because the whole process is automated.
  • All the transactions done through NACH are safe and secure.
  • The bank can collect payments in no time because the process is fast.

Working of NACH Facility

You will understand the working of the NACH Facility that is the National Automated Clearing House facility better with the help of an example. Suppose you have to pay a credit card bill and the last for making the payment is the 15th of every month. But you don’t remember the date every time and an extra fee is charged on that amount.

So, by making use of the NACH facility, you can pay the bill on time and you will not have to remember the due date every time. You will have to define the date and your credit card bill will be paid automatically to the bank on the defined date. Even if you don’t remember the due date, the bank will debit the credit card bill amount through the NACH Facility. But remember, you will have to maintain a sufficient balance in your account and it must be more than your credit card bill.


Now you know the NACH full form that is National Automated Clearing House and its benefits too. You can make use of it to save time and it is a fast and secure process. If you have the habit of forgetting the bill payment dates then this facility would be the best option for you. The NACH payment system will debit the payment automatically every month and you will just have to set up the NACH facility.


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