Listen to this article
NACH mandates will now have a validity of a maximum of 30 years.
In a circular issued, NACH (National Automated Clearing House) said, “Validation will be built in the central system to accept only the mandates that are for a duration of 30 years or below.” These mandates give standing instruction to banks to auto-debit the SIP amount towards the specific mutual fund and this move is likely to introduce more robustness, believes NACH.
Hence, the ‘until cancelled’ option will no longer be available and investors will now have to mention a specific end date which cannot be more than 30 years from the date of issuance.
However, the existing perpetual SIPs or any perpetual SIP opened before Sept 30, 2023 will not be affected.Since the circular will be effective from October 1, 2023, these provisions are not relevant for existing SIPs. “This is applicable for all forms (physical as well as electronic) of mandates”, clarified NACH.
