What changed
RBI clarified that bank branches cannot insist on routing customer ECS mandate withdrawal requests through the user institution. Withdrawal instructions must be treated equivalent to a 'stop payment' instruction in cheque clearing, allowing customers to directly approach their bank.
What it means for you
Banks must now process customer revocation requests for ECS debit mandates without waiting for confirmation from the utility company. This reduces procedural friction and empowers customers, but banks need to update their internal processes and train staff to handle these requests efficiently. Non-compliance may lead to customer complaints and regulatory scrutiny.
What you must do
- Advise all branches to accept ECS mandate revocation requests directly from customers without routing through user institutions.
- Treat such revocation instructions as equivalent to stop-payment instructions in cheque clearing.
- Ensure branches can handle cases where transactions are included in ECS files post-revocation, following stop-payment procedures.
- Coordinate with utility companies to ensure they exclude revoked mandates from ECS files if notice is given 15 days prior to submission.
- Report repeated violations by user institutions to the Clearing House.
Who it affects
All scheduled commercial banks, Bank branches handling ECS debit clearing, Utility companies using ECS for bill collection, Customers with ECS debit mandates
Can a customer directly approach their bank to revoke an ECS mandate?
Yes, RBI has clarified that customers can directly submit revocation instructions to their bank, and the bank must treat it like a stop-payment instruction without needing confirmation from the user institution.
What should a bank do if a user institution includes a transaction after revocation?
The bank should handle it as per stop-payment procedures in cheque clearing. If repeated, the bank can lodge a complaint with the Clearing House.
Is there a timeline for user institutions to act on revocation?
User institutions must exclude the transaction from the ECS file if the withdrawal instruction is received at least 15 days before the ECS file submission date.