Registering SIP to get easier and faster

National Automated Clearing House system (NACH), initiated by National Payments Corporation India (NPCI), a system which helps faster transaction settlement, wider coverage and superior mandate management system has been adopted by HSBC Mutual Fund and Reliance Mutual Fund, says a press release issued by HSBC.  

NACH is a new payments system which incorporates best practice functionality from existing systems around the world.

Currently registering a SIP ECS mandate takes 21 days and there is no process to track if the ECS has been confirmed at the bank’s end. NACH is an online end-to-end electronic system which helps fund houses register SIP mandates swiftly. The concept is new to India, having been operationalized in December 2012. NACH can be utilized to pay utility bills, insurance premiums and mutual fund SIP ECS.

“The NACH Debit is an effective way to collect funds from our consumers spread across remote locations in India as compared to Electronic Clearing System Debits – not only are mandates registered within 3-4 days as compared to 21-25 days, it also covers all IFSC enabled branches across India. The same day transaction information also enables locking in of the funds at the current day’s NAV as compared to ECS debits where we receive information only after 3-4 days.” said Sundeep Sikka, CEO, Reliance AMC.

“The NACH system is an effective platform, especially in our effort to provide “best-in-class” services to our investors. The NACH platform will help us improve upon the processes and timeliness of SIP registrations as compared to the current industry standards. The system also enables dividend payouts across our investor base in a seamless and timely manner. Finally, the platform will also provide us with a wider reach as compared to the systems prevalent today,” said Puneet Chaddha, CEO, HSBC AMC.

HSBC is the first bank in India to complete live customer transactions on the NACH debit platform in March this year, the release said.