Technology advancement has brought bountiful development in the banking industry. Gone are the days when one needed to stand in long hours of queue to send money to a distant location or for other banking activities too. With electronic fund transfer facility increasing its presence, customers are indeed getting work done in hassle free process.
In India, banking regulator Reserve Bank of India has approved fund transfers in form of National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS) and Electronic Clearing Service (ECS).
ECS: Electronic clearing service is an electronic mode of fund transfer from one bank account to the other. Using this mode of transfer, a person can send or receive funds to/from distant locations easily and conveniently. It requires both remitting (sender) bank and beneficiary (receiver) bank to be notified of the transfer. It is mostly used for small money transfers in bulk and thus the common man finds it to utmost usage.
Process of fund transfer by ECS: The sender needs to give a mandate to the remitting bank about the amount of funds to be transferred along with other details. In other words, it refers to a document containing details of the bank branch where funds are to be transferred along with account details.
It is not necessary that only one mandate be given to the bank. The sender can assign the maximum amount to be debited into beneficiary's account, the number of transactions that should be carried out, purpose of debit as well as validity period in every mandate.
Beneficiary branch has to be informed of the transfer prior to the actual transfer taking place.
Once transfer has taken place, the remitter is let known of the transaction through mobile alert or email alert as specified by him.