Bank vacation will not stop your loan EMI, SIP debits, and salary credits


The Reserve Bank of India (RBI) has announced that the National Automated Clearing House (NACH) system will be available every day, including Sundays and bank holidays, effective from August 1, 2021.

This means that on August 1, payments such as pay credit to your bank account, auto-debits related to mutual fund SIPs, home/car/personal loans, EMI payments, telephone bills, gas payments, and electricity bills will take place even on bank holidays.

Be sure to keep your account balance on the debit day from August to avoid penalties related to low balance and debit not being held in the account. Currently, one Sunday’s balance is not enough to meet your account debit, but if the balance is enough for one Monday debit due to credits, your debit will not fail because it does not occur on Sunday. However, this will not happen from August.

Currently, the bank does not process any auto-debit instructions issued by the holder of the holder, such as Sundays, bank holidays, and gazette holidays, on closed days. Also, since most companies use notch for payroll credits, these do not occur even on bank holidays.

The announcement was made by Reserve Bank Governor Shaktikanta Das on June 4, 2021, during the central bank‘s monthly monetary policy announcement. According to the Reserve Bank Governor, the decision was taken to increase customer convenience.

According to the Reserve Bank of India: NACH is currently available only on working days of banks. In the interest of customer service and to take advantage of the availability of RTGS on all days of the year, NACH is proposed to be available on all days of the week throughout the year with effect from 1st August 2021. It can be recalled that over the past few years, RBI has launched electronic fund transfer services such as NEFT and RTGS available 24X7 to promote digital transactions in the country.

NACH is an NPCI bulk payment system that facilitates one or more credit transfers, including the payment of dividends, interest, salaries, pensions, electricity, gas, telephone, water, and periodic installments on loans, Investing in mutual funds, insurance premiums, etc.

The customer does not have to issue cheques every month after giving notch instructions to a bank, fund house, or biller such as a mobile service provider. Like an ECS mandate issued to the bank in the case of NACH, NACH automatically deducts the money from the customer’s account as per the instructions given. This has enabled the timely transfer of government subsidies during the current COVID-19 pandemic.

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