NACH Faqs

Question: What is NACH?

In laymen language, NACH is mechanism where customer’s premium will directly deduct from his Bank

account and deposit to LIC.

Question: What is NPCI?

NPCI stands for NATIONAL PAYMENT CORPORATION OF INDIA. It is an UMBRELLA

ORGANIZATION for all retail payments in India. It was set up in 2008 with the guidance and support of

the RBI and Indian Bank Association (IBA).

Question: What is UMRN?

UMRN stands for Unique Mandate Reference Number. It is unique no and allotted to each NACH

registration. It is very important and used for all future transaction between LIC and Banks.

Question: What is the difference between NACH MANDATE & INVOICE?

Mandate is given by Policyholder to register policy under NACH. It is given only one time if successful.

Invoice is generated by LIC for Banks to receive premium on due date in successful NACH registered

policies. It can be dishonour by bank and it will be treated as cheque dishonour.

Question: What is the difference between NACH & ECS?

NACH and ECS is same concept that Premium will deduct automatically but registration process and

post registration mechanism is different and easy in NACH. ECS was managed by RBI and NACH is

managed by NPCI. Policies which were registered under ECS have been migrated in NACH by NACH

centre.

Question: What is difference between NACH & SSS?

Under NACH premium is deducted from Bank account whereas in SSS premium is deducted from

salary and deposited by paying authority. NACH can be opted by anyone whereas SSS is opted only

by employees working under LIC registered Paying Authority.

Question: Does a costumer get PREMIUM RECEIPT in NACH mode?

In mode except MLY receipt is being issued by NACH centre. No receipt is issued in NACH MLY

mode. Customer can obtain Premium Paid Certificate.

Question: How can we get PREMIUM RECEIPT?

Costumer receives premium receipt send by NACH centre in mode other than NACH MLY. No receipt

is issued in NACH MLY mode. Customer can obtain Premium Paid Certificate from BRNACH.

Question: Can we change mode anytime in NACH mode?

Yes, we can change mode anytime in NACH using PS option for mode alteration.

Question: In which policies/plans we can avail NACH facility?

All plans and policies can be registered under NACH including ULIP and Health.

Question: When can we avail NACH facility?

NACH option can be availed at INCEPTION / NB stage as well anytime during premium paying term at

PS stage.

Question: How many premiums need to be paid in advance?

At NB stage it is compulsory to pay 2 MLY premiums for NACH MLY mode. We suggest that if

customer opts for NACH MLY mode at PS stage; take 2 premiums (current month & next month) in

advance.

Question: How to start NACH at PS stage?

Using PS NACH module (if customer wants to register policy in NACH without changing current

mode/frequency)

Using PS alteration module (if customer wants to change existing mode/frequency)

Using RFM 96 option in PS module, Branch can register NACH.

Question: How to deregister NACH?

Using RFM 97 option in PS module, Branch can de-register NACH.

Using PS alteration module, if customer wants to stop NACH. Give “N” for NACH.

You can also send one mail to NACH centre to cancel NACH in a policy with customer’s application

and KYC.

Question: Hot to change ordinary-NACH policy to SSS?

RFM option 55 is available in PS module to change DEBIT DATE.

Question: How can we effect change of Bank?

Using RFM98 in PS module, we can change customer’s Bank or Bank account. For change in Bank

details, fresh mandate form should be submitted.

Question: What if we have entered wrong data in efeap while keying in. How to make correction in

efeap at BRANCH level before ticking and sending to DIVISION?

To correct data entry mistake, Branch should use correction option under NACH module. This option

will ask for SERIAL NO and MANDATE TYPE. You can know serial no and mandate type for any

registered policy using MANDATE LISTING/ENQUIRY option. For PS Mandate type is 2/3 and for NB

mandate type is 1.

This option can only be used if you have not ticked and escalated to division.

Question: What if we have entered wrong data in efeap while keying in. How to make correction in

efeap at BRANCH level after ticking and escalating to DIVISION?

If you have ticked in Mandate management system then you can not correct data entry mistake. You

need to send mail to NACH centre to cancel the NACH. After confirmation you have to register NACH

again.

Question: What if we have entered wrong data and before correcting it at BRANCH level, we have

ticked in MANDATE MANAGEMENT SYSTEM to send to DIVISION. How to make correction?

If you have ticked in Mandate management system then you can not correct data entry mistake. You

need to send mail to NACH centre to cancel the NACH. After confirmation you have to register NACH

again.

• What are the DEBIT-DATES available?

Debit dates allowed are 7th, 15th, 22nd and 28th of the month and Debit dates are calculated

automatically on the basis of Date of commencement. If Date of Commencement

1st to 7th: 7th of the month.

8th to 15th: 15th of the month.

16th to 22nd: 22nd of the month.

23rd to 31st: 28th of the month.

• Can a CUSTOMER apply for change in DEBIT-DATES?

Yes customer can apply for change in DEBIT DATE but there are only 4 options are available.

Customer has to choose one date out of given options which are 7th,15th, 22nd 28th of the month.

• How to change DEBIT-DATE?

RFM option 77 is available in PS module to change DEBIT DATE.

• Does NACH system collect PAST DUES (PAST UNPAID PREMIUM)?

Arrears of premiums cannot be collected through NACH.

• Can I pay premium through other channel if policy is registered in NACH.

No, if policy is registered in NACH you can not pay using any other channel. However in case of invoice

dishonour or after grace period of any FUP, customer can pay premium.

• Why NACH does dishonour?

Once NACH is successful, LIC sends invoice to Banks for each policy whenever premium is due. This

invoice can be dishonour by customer’s bank if fund is insufficient or customer account is dormant etc.

Invoice is generated and sent to customer’s bank 4 days in advance by NACH centre for timely

deduction.

• What are the charges costumers have to pay when invoice dishonour?

For the dishonors, LIC sends a letter to the policy holder intimating the dishonor with reason. If the

reason is insufficient funds or Account closed dishonor charges of Rs. 125/- will be payable in addition

to the due premiums and the late fee (if applicable).

• Dose Premium History show dishonour of NACH invoice?

No premium history will be written for dishonor transaction; instead the dishonor tag is posted in the

policy master.

• How to correct FUP in NACH invoice dishonour cases.

FUP will remain same in case of dishonor. One Time Correction Option: Single window —- main menu

—– policy servicing menu — branch menu — nach enquiry menu ——NACH Correction

• When and how costumer should pay premium for DISHONOUR Invoice?

If NACH is dishonored due to any reason, NACH deduction will automatically stop for the further dues

until the premiums are paid up-to-date. Customer can pay up to date premium with dishonor charges

and late fees, if any.

• What is difference between Mutual Funds’ SIP system and LIC’s NACH?

Both are almost same and do same work- AUTO DEBIT.

But most of Mutual Fund companies are using DIRECT DEBIT facility. LIC uses NACH facility.

• What is different between DIRECT DEBIT & NACH?

If Mutual Fund Company’s bank is same as customer’s Bank, It’s called DIRECT DEBIT. If Mutual Fund

Company’s bank is different from customer’s BANK, It’s called NACH.

• Why LIC does not use DIRECT DEBIT facility?

LIC is already using DIRECT DEBIT facility where customer can apply for DIRECT DEBIT facility using

INTERNET BANKING.

• Whom life costumer can register NACH?

NACH can be availed of not only in respect of the policies of self but also on the policies effected on the

lives of the close relatives like spouse and dependent children (i.e.) the relatives on whom policies the

policyholder can claim I.T. relief for the payment of premium.

• Can policy holder and bank account holder be different?

Yes, Policyholder and Bank account holder can be different. Branch must key-in account holder’s name

in efeap not policyholder’s name.

• What is the process of NACH?

NACH is registered at Branch/SO and then send to Division. Division is not having any option. DO

collect Mandates from all branches and handover to sponsor bank. Sponsor bank scans the mandate

and sends it to NPCI where UMRN generates and NPCI sends this scan image to Customer’s Bank.

There is time period of 45 days in which customer’s bank has to accept the mandate or reject the

mandate with reason. This response is sent back to sponsor bank and sponsor bank sends it to NACH

centre. Before this there is no role of NACH centre or LIC.

• From which date does 45 days time period start?

This 45 days time period starts from the day on which Mandate was sent to customer’s bank from

NPCI. Even after 45 days, being pressurised by NPCI, Customer’s bank is giving response as

successful or Reject. One of the reject reasons is TAT – Turn around Time expired.

• Why Mandates which are pending for more than 45 days are not being rejected due to TAT

expired? Why MANDATES are pending beyond 45 days?

Customer’s banks are not responding in stipulated time which is 45 days and even not rejecting the

MANDATE as TAT expired after 45 days. NACH centre can not reject any MANDATE. Rejection should

be done by Customer’s bank with rejection reason.

• Which office of Customer’s Bank does manage NACH?

All banks are having centralised centre for NACH clearing. Customer’s Bank branches are not having

any authority or knowledge regarding NACH. This is why customer’s bank’s branch misguide

policyholder and put responsibility on LIC.

• What precautions to take in signature on NACH MANDATE?

Signature must be signed using BOLD BLACK BALL PEN and should be same as in Bank not as in

LIC. Customer should sign above “signature of a/c holder”. Though space given for signature is very

restricted, try to use it carefully.

• Is THUB IMPRESSION allowed?

Thumb impression is not allowed at all. Customers who are having joint account and one of the account

holders is having thumb impression in BANK and second account holder is having signature, then too,

it is not allowed. (Even if joint account is opened with condition “EITHER OR BOTH or SURVIVOR)

• What is the rule for JOINT ACCOUNT holder?

If customer’s bank account is joint account then all account holders must sign the MANDATE. (Even if

joint account is opened with condition “EITHER OR BOTH or SURVIVOR).

• What is the rule for individual account holder?

Put your signature only once (not three times) in space given using BOLD BLACK BALL PEN and write

your name as mentioned in bank account.

• Which colour ink should be used in NACH MANDATE?

You must use BOLD BLACK BALL POINT pen to fill NACH MANDATE to reduce rejection of NACH.

• Who should sign the NACH MANDATE?

NACH MANDTAE must be signed by BANK account holder(s) and signature must tally with BANK.

Policyholders name is not required to write anywhere in mandate or in efeap.

• What are the reasons for rejection due to IMAGE NOT CLEAR?

Branches, Agent and Customer must use BOLD BLACK BALL POINT pen to avoid this reason of

rejection. Using light ink blue pen or black pen is also one of the main reasons. Moreover sponsor bank

can not see the scanned image as per guideline.

• What is the reason for rejection due to SIGNATURE ILLEGIBLE?

Customer should put signature above “signature of a/c holder” and must use BOLD BLACK BALL

POINT pen to avoid this reason of rejection. Writing on “signature of A/C holder” makes signature

illegible as signature and pre printed line “signature of A/C holder” get mixed.

• What fields should be filled by AGENT/COSTUMER in NACH MANADTE?

All fields are compulsory to fill but Agent / Customer must fill all the filed except PREMIUM AMOUNT,

DATE, START DATE.

• What filed must be filled by BRANCH in NACH MANDATE?

Branch / SO/ CZone must filled three details from system after taking printout containing list of

mandates to be sent to division. 1. Date 2. Start Date 3. Amount (both in words and Figure)

• Where to tick for frequency on NACH MANDATE?

DO not keep it blank (pre ticked as and when presented is not acceptable) tick correct frequency as

selected by policyholder.

• What should be the START Date?

Start date must be taken from system only. It is always mentioned on printout containing list of

mandates to be sent to division.

• What should be the DATE of NACH MANADTE?

It can be any date but prior to start date. This date can not be later than start date. Try to keep it same

as to avoid any misunderstanding.

• Which box to be tick CREATE/MODIFY/CANCEL?

Only CREATE Box is to be ticked in all cases. Do never tick on MODIFY. To cancel NACH MANDATE,

No mandate is required.

• What fields are compulsory in NACH MANDATE?

All fields are compulsory to be filled except email

• Which amount should be filled in NACH MANDATE?

Amount must be taken from system only. It is always mentioned on printout containing list of mandates

to be sent to division.

• What precaution should be taking while filling BANKACCOUNT in NACH MANDATE?

It should be latest account no as per CBS system. OLD account code which are less than 9 digits are

not acceptable. It should be filled using BOLD BLACK BALL PEN and must start from left side and

should be exactly same as in Bank account. {Do not remove zero(s) if account starts with zero(s)}

• Is alteration allowed in NACH MANADTE?

No, No alteration is allowed in NACH Mandate. It is advised to give new mandate.

• Which field must be filled IFSC or MICR?

Anyone field can be filled but IFSC code is preferable.

• What if mobile no in NACH MANDATE is different from mobile no registered in POLICY?

There is no issue if mobile no is different. Mobile no can be different in NACH master and in Policy

Master because Policyholder and Accountholder can be different. However, At present there is no

synchronisation between NACH registered mobile no and efeap mobile no. and there is no option to

change mobile no in NACH master.

• How many premiums can be taken in advance to avoid lapse of policy?

It is advised that in MLY NACH mode, Branch should take 2 MLY premiums in advance at PS stage as

it is allowed in system.

• What are the reasons of rejection due to NAME MISMATCH?

Name on MANDATE &efeap must be same as bank account. If it is proprietary firm then policyholder

must put firm’s stamp on mandate and branch should key-in firm’s name in efeap not proprietor’s

name.

• What is the rule for PROPERITER ACCOUNT?

• In properties account, account holder must put seal of firm and signature of proprietor. Branches

must remember to key in firm name in the field of “Name of Bank account holder” in efeap. Do not

key in proprietor’s name in efeap.

• What is the rule for BRANCHES while attending costumer’s query regarding NACH?

This is very important for branches to know that while attending customer’s query or complaint you

must check policy’s NACH MASTER STATUS in efeap and status in NACH centre through NACH

centre website. Then you will be able to understand a status completely. Viewing only status from

efeap is not enough so please visit NACH centre’s site also. You can also visit PCMC site for more

information.

• What is the meaning when three DATES AVAILABLE & one is blank in NACH STATUS?

It means that NACH is pending at customer’s bank. Customer’s bank is taking time in giving

response. Customer is advised to wait for 2 months from date of registration and in MLY mode

please pay premium over the counter after grace period.

• When invoice is generated in SUCCESFULL NACH MANADTE cases?

In successful NACH registered policies, invoice will be generated 4 days in advance from actual

DEBIT DATE and will be sent to customer’s bank thorough our sponsor bank.

• What is the average NACH process time?

It is 2 months. NACH usually takes 1-2 months. If it doesn’t get accepted or rejected, kindly send a

email to NACH CENTER before taking new NACH MANDATE from customer.

• When to pay premium if NACH is pending and counter is not accepting premium?

If NACH is pending and counter is not accepting premium or in other cases also, you can pay

premium after grace period. Before that if customer insist to pay, kindly contact NACH centre.

• What is to be done at Branch Office?

Role of branch is very important in NACH process and it is disappointing to say most of rejection are

because of failure of branch’s scrutiny. Branch should be aware about NACH rules and keep

upgrading their knowledge.

Before registering up to date premium should be paid and if possible in MLY mode cases, next

Month premium in advance as it is allowed by system.

Do not register NACH MANDATE which are incomplete or wrongly filled or having alterations or

overwriting. Take new form.

Remember to tick only CREATE BOX, putting sponsor code and Division code if this filed is blank.

Remember to write amount and both date from printout generating from efeap .

Ask customer and agent not to fill amount and both dates at all.

Before sending NACH to division see all mandates and verify that all files are filled except EMAIL.

And most important that do not tick in efeap to send a NACH to division of you do not have NACH

MANDATE in hand.

Branch officials must remember that customer’s bank verify MANDATE with softcopy generated

through efeap. If you keying wrong data or MANDATE has different data then soft copy, it will get

rejected. So kindly verify that MANDATE has same data as keyed in efeap such as start date, date,

amount, policy no and Bank account holder’s name.

Branch Officials are also advised to put stamp or write branch code with department (NB/PS) at the

back of NACH Mandate form.

• What is to be done at Division Office?

Division should send NACH MANDATE to sponsor bank regularly.

Division should be vigilant that sponsor bank has received SOFT COPY of mandates which is

automatically sent to sponsor bank thorough efeap and a computer generated acknowledgement

mail from sponsor bank comes back on division NB email.

Though it is not possible to scrutiny 200-400 NACH MANDATE thoroughly but it is suggested to

check important filed at division level before ticking in efeap.

Division should update branches knowledge regarding new changes in NACH.

• What is to be done at NACH centre?

NACH centres are required to speed up the process so that LIC can encash this big opportunity of

having increased policies and by penetrating in lower middle class segment.

One most important part which NACH centre must play that keep sending information to branches.

NACH officials come across so many issues and their solutions. They should keep updating

knowledge of branches so that branch officials can handle NACH related queries very well.

• What fields must not be copied from NACH MASTER in NEW NACH MANADATE in rejected

cases?

If customer or agent is giving new mandate due to rejection of last mandate or due to no response

in last mandate, they should not copy from efeap because it may lead to rejection of new mandate

as well. And in case if they are copying, do not copy and write UMRN no from efeap. UMRN no is

unique for all NACH MANDATE and you should not write old UMRN in new mandate.

• What are the reasons for INVOICE rejections?

There can be so many reasons but INSUFFICIENT BALANCE on the date which invoice was

presented in customer’s bank is the main reason in most of the cases. Second is account

closed/blocked/dormant or inoperative etc. In both cases Customer’s bank and LIC charges invoice

dishonour charges.

• What are the reasons for MANDATE rejections?

Most of the MANDATES are getting rejected due to signature mismatch and mistake done by

branches. Signature mismatch can be due to misunderstanding from customer. We should educate

account holder that he must sign same as in bank not as in proposal form. Branches are committing

mistake by sending incomplete or wrongly filled mandate or by keying completely wrong data in

efeap.

• Which language should be used while filling NACH MANADTE?

Only ENGLISH is to be used while filling NACH form.

• Which language should be used in signature by customer?

Customer can sign in any language but same signature as in bank account.

• What happens in case of Invoice Dishonour?

In case of invoice dishonour Bank charges invoice dishonour charges and LIC too charges invoice

dishonour charges Rs. 125 per policy. In case of invoice dishonour customer should pay the

premium over the counter with dishonour charges and late fees if any. Until customer pays up-todate premium, further premiums will not be deducted automatically from Customer’s bank.

• Can I check dishonour transaction history in premium history?

As of now, transaction of invoice dishonour is not written in premium history. So you can not see

Dishonoured transaction in premium history but a flag of dishonour is posted in policy master so that

customer pays premium with dishonour charges.

Question: How much time does it take to update FUP in efeap after Bank deduction?

Sponsor banks send us data of deduction of premium form customer’s bank after DEBIT DATE but

in 2-3 working days. NACH CENTER takes another 1-3 days to update FUP in all policies where

premium has been received by NACH centre depending upon efeap server speed and load.

Question: What is the reason for rejection of few Mandates out of all pertaining to same person and

having same details?

Some time one customer give many NACH MANDATE for his many policies but some MANDATES

get successful while others get rejected. It can be happen due to any reason but one of the reason

is “maximum limit for per day transaction in his Bank account” that means every account has some

limit for per day transaction which can be modify using internet banking or by contacting bank. So if

a customer is giving 10 NACH form having total 30000 premium with same DEBIT DATE it is

possible that Customer’s account has limit of Rs 25000 for per day transaction. So 7-8 NACH

whose total is less than or equal to 25000 will get accepted and other 2-3 will get rejected.

Question: What is the reason of rejection due to “not maintaining minimum balance”?

Most of the bank charges from customer for registering NACH for first time. If customer is not

having enough balance on the day when NACH is being registered by bank and charges need to be

deducted, bank will reject the MANDATE as it could not deduct charges due to insufficient balance

and MANDATE would be rejected with this reason.

Question: What is the reason of rejection due to “DATA MISMATCH”?

This is second big reason for NACH MANDATE rejection. Banks verify MANDATE details from soft

copy generated and sent to customer’s bank through efeap and if there is any difference between

soft copy’s data and mandate’s data, it will be rejected due to reasons such as data mismatch,

period is wrong, wrong account no, wrong Bank account holder’s name, invalid frequency etc.

Question: In what time should be give new MANDATE in pending cases?

Customer should wait for at least 2 months as it is average time. After this, new MANDATE can be

taken from customer. Otherwise after 30 days it is allowed to give new MANDATE.

Question: What are the bank charges for NACH MANDATE registration?

For registering NACH MANDATE LIC does not charge anything but almost all bank charges for it.

Charges for registering NACH MANDATE differs from Bank to Bank and depends on Customer’s

bank. LIC has no responsibility and role in it.Question: uestion: What are the bank charges for Invoice rejection?

Bank’s Charges for invoice rejection is different from Bank to Bank and depends upon customer’s

bank. LIC does not charge from Customer’s account. LIC has no responsibility and role in it. LIC

charges Rs. 125/- per policy from customer when he pays premium over the counter.

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