Though National Automated Clearing House (NACH) was introduced two years ago, the SBI began its actual switch to the new system last month, at the end of two-year transition period.
In the transition, “what is happening is that 40-50% of the old mandate [ECS] are getting returned unpaid,” SBI Hyderabad Circle Chief General Manager J. Swaminathan said, attributing it to technical glitches.
Without sharing the number of affected SBI loan customers, he said it was an industry-level issue, involving thousands of records for each bank. The “proportion [of the problem] may be smaller for smaller banks. As SBI has a large amount of clearing which goes through us, so we have a fair share of our numbers,” he added.
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Customers hit
But customers bear the brunt. From delay, to penal charges for late payment, penalty for the return as well as some ending paying twice — once at the counter and then the EMI also going through, albeit late. Some customers have also received text messages from SBI. One such read. “Due to migration from Electronic Clearing System to National Automated Clearing House, we are facing delay in processing your ECS request towards the repayment of your loan account. Hence, you are requested to submit new NACH form (if not submitted earlier) along with cancelled cheque…”
Mr. Kumar was shocked after the private bank debited his savings account ₹590 as return charges last month. This was after the EMI debit, for a car loan with the SBI that he had pre-closed in 2016, was made and his account did not have sufficient funds.
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‘Amount to be refunded’
Mr. Swaminathan does not deny the possibility of more customers like Mr.Kumar on account of the old mandates, obtained under ECS, also getting scanned and added to the electronic files under NACH. Regretting the inconvenience, he said such customers could raise a complaint and the amount would be refunded.
Meanwhile, NPCI has allowed use of ECS as well as NACH formats on two days of a week as a remedial measure. With this, State Bank of India is hopeful of resolving the issue by this month, the CGM said, assuring that all the penal charges, except those levied for insufficient funds in the account, would be returned.