NACH (National automated clearing House) is an electronic payment solution, which facilitates high volume repetitive and periodic transactions. This facilitates both debit i.e. collections and credit i.e. remittance transactions that are easy, simple and quicker to manage.


NACH enables collections of repetitive receivables like Utility bills (electricity/telephone/Mobile bills, credit cards, etc), Mutual Fund (SIP), Insurance Premium, Loan Instalments, credit card payments, payments of donations and other bill payments as well.

Entities involved in NACH:
Entity Functions
Sponsor Bank (Equitas Bank) Sponsor Bank is the Bank, which lodges NACH Transaction files for collection/ distribution of funds on behalf of its Corporates registered for NACH services. In case of loan EMI, the Bank acts as User Institution as well as Sponsor Bank.
Destination Bank (customer’s account holding bank) The Bank responsible for the processing of Inward NACH transaction file is known as ‘Destination Bank’.
  • Intermediary between the Sponsor and Destination Bank Creates Utility code for the corporate and communicates the same to the sponsor bank.
  • Generates the unique mandate reference number (UMRN) for each of the registered mandates and sends it to the respective destination banks.
  • Transaction file uploaded by the destination bank will be allocated to the respective destination bank for processing the transaction.
  • Updates the sponsor bank with the transaction response upon completion of the transaction.
Mandate Holder
  • Customers of the corporate/user institution are required to fill up the mandate details such as Name, account no, bank name IFSC code, amount, tenure of transaction in the mandate and submit the same to the corporate/ User institutions.
Institution User Code/Utility code Utility Code/ Institution User ID refer to the User Number that will be allocated by NPCI, to the Corporates.
Mandate Mandate is a one-time registration process. It is just an authorization to the bankers to debit the account with a fixed amount or up to a certain limit as per the frequency given by the customer in mandate form.
UMRN UMRN - UMRN is a Unique Mandate Reference number allocated to each new mandate created in NACH Debit. It is auto generated by the NACH system during mandate creation. UMRN is mandatory for every transaction.
Transaction files Transaction file is the file containing the transaction details along with the customer account details (name, account no, ifsc code) along with the amount and the period of transaction.