eMandate - Introduction, Benefits, Eligibility & Process

With the introduction of the eMandate system, the loan process has been streamlined and digitised. Customers can now easily set up automatic recurring payments from their bank accounts with a few clicks, eliminating the need for physical visits and manual paperwork. This saves time and effort and ensures timely payments, reducing the risk of late fees or penalties. Additionally, eMandate provides a secure and convenient way to manage recurring payments, giving customers more control over their finances.

In fact, according to a report by the National Payments Corporation of India, eMandate-based transactions grew by a staggering 545% from 2019 to 2020. Keep reading to learn more about this innovative system and how it's transforming how we interact with banks and financial institutions.

What is eMandate?

eMandate is an electronic authorisation process that allows businesses to collect recurring payments from their customers in India. It is an electronic version of the traditional mandate that NPCI and RBI issued to the banks and financial institutions. The key difference between eMandate and ECS mandates is that eMandate is a more advanced and streamlined version, allowing for easier and quicker setup and management of recurring payments.

Through eMandate, customers can authorise their bank or financial institution to debit their bank account or credit card for recurring payments such as loan repayments, insurance premiums, subscription fees, and utility bills. This process eliminates the need for physical paperwork and signatures as customers can submit their authorisation electronically via an online form. Other examples of payments that can be made through eMandate include rent, school fees, and charitable donations.

The eMandate system was created by the National Payments Corporation of India (NPCI) and RBI. These regulatory bodies provide businesses with an IT infrastructure to collect recurring payments securely and efficiently from their customers. Using eMandate simplifies the loan application and repayment process, eliminating the need for manual paperwork, reducing processing time, and ensuring timely payments.

What is the eMandate Process?

eMandate process refers to the electronic authorisation process for recurring payments in India. It allows customers to authorise a bank or financial institution to debit their bank account or credit card for recurring payments such as insurance premiums, utility bills, subscription fees, loan repayments, etc., without needing physical signatures or paperwork.

The eMandate process involves using an electronic mandate form that customers can fill out and submit online. The form requires customers to provide their bank account or credit card details, payment amount, frequency, and duration. Once the mandate is approved, the payment amount will be automatically debited from the customer’s bank account or credit card on the scheduled date.

This process is convenient and secure for both customers and businesses. It eliminates the need for manual paperwork, reduces processing time, and ensures timely payments, all while maintaining the utmost privacy and security of customer information.

The eMandate process consists of three stages:

Registration of the eMandate:

eMandates are created and registered according to the prescribed procedure.

Presentation of the Balance Sheet: 

You can consider it a document containing all the debit details sent to the National Payments Corporation of India (NPCI). If sufficient funds are available, the destination banks will execute the payment.

Transfer of Funds: 

This is the stage in which the NPCI settles the payments between the sponsor and the destination bank. The funds from the destination bank are then transferred to the creditor’s account.

How to Register for eMandate?

To register for eMandate, you can follow the steps below:

1. Contact your bank: Contact your bank to find out if they support eMandate registration and what the process is. You may be required to fill out a form or complete the registration process online.
2. Provide necessary information: You must provide your bank with the required information, including your name, address, bank account details, and any other required information.
3. Provide mandate details: You will also need to provide the details of the mandate you wish to set up, including the amount, frequency, and start date.
4. Authenticate your identity: You may be required to authenticate your identity through your bank’s online banking platform or by providing a physical copy of your identification documents.
5. Complete the registration: Once you have provided all the necessary information and authenticated your identity, your bank will complete the registration process and set up the eMandate.

It’s important to note that the exact process varies based on your bank’s internal policies and official procedures. You can contact your bank’s customer service department for more information on how to register for eMandate.

For a better understanding, here is how to activate your eMandate in HDFC Bank:

To activate eMandate in HDFC Bank, you can follow these steps:

1. Log in to your HDFC Bank NetBanking account using your User ID and Password.
2. Select the “e-Mandate” option from the home page under the “Request” section.
3. On the next screen, select the “Register New Mandate” option.
4. Please provide the required details, such as your name, bank account details, and the service provider details for whom you want to set up eMandate.
5. You must select the type of eMandate you want to set up – either a one-time or recurring mandate. A one-time mandate is for a single transaction, while a recurring mandate is for automatic payments for a fixed period.
6. Once you have filled in all the details, click the “Submit” button.
7. You will receive an OTP (One-Time Password) on your registered mobile number. Enter the OTP on the next screen to complete the verification process. 
8. Once your mobile number is verified, you will receive confirmation that your eMandate registration has been successfully submitted.
9. HDFC Bank will verify your details and activate your eMandate within a few working days.

Note: You can also set up eMandate through the HDFC Bank mobile app by selecting the “e-Mandate” option from the menu and following the abovementioned steps.

Eligibility Criteria to Activate eMandate

Before setting up an eMandate, ensure you have the required eligibility criteria. This includes having an Aadhaar card, a bank account, and both documents linked (i.e., an Aadhaar-linked bank account). The eMandate service’s financial institution must also be registered to provide NACH (National Automated Clearing House) services. 

The eMandate service’s financial institution must also be registered to provide NACH (National Automated Clearing House) services.

To complete the eMandate setup process, you will need to provide:

• A filled eMandate form
• Your Aadhaar card
• Bank account details
• The mobile number that is linked to both your bank account and Aadhaar card

It is important to note that an eMandate can also be rejected for various reasons, such as the bank needing to provide NACH services, incorrect account details entered, or the wrong folio number or linked information provided. To avoid any unexpected rejections that may delay your transactions, it is essential to thoroughly understand the eMandate process before initiating it.

What Are the Advantages of eMandate?

eMandate offers many benefits that make it a preferred choice for recurring payments. Firstly, the registration process is hassle-free and can be completed seamlessly with a bank account with net banking access. This eliminates the need for physical forms and makes future payments smooth and effortless. Additionally, any changes to the bank account can be made without visiting the bank branch.

Secondly, the eMandate process saves time, as the verification is done within hours, compared to the weeks it would take for physical mandates. This quick turnaround time ensures that the auto-debit process starts soon and that payments are not delayed.

Thirdly, eMandate offers a pan-India presence, enabling customers to make payments from anywhere in the country. It eliminates the need to visit the bank or service provider, thus saving time and effort.

Fourthly, the one-time authentication during e-mandate registration enhances customer retention and loyalty. Worrying about interruptions or making physical payments is unnecessary, thus improving the customer experience.

Lastly, the digital process enables customers to track transactions online, making reconciliation easier and avoiding using multiple cards. EMandate is a convenient, efficient, and reliable way to make recurring payments.

How to Cancel an eMandate?

To cancel an eMandate request, customers must authenticate themselves using their login ID, password, OTP, or any other method established by the platform’s internal process. 

Once authenticated, the customer can view a list of their registered mandates and select which ones they want to cancel. However, cancellation requests are only allowed after the customer’s verification, and a pop-up message will appear asking for their reconfirmation before proceeding with the cancellation.

The customer’s registered mobile phone will receive an SMS notification indicating that the mandate cancellation process has begun. The platform then drafts and submits the cancellation file through its sponsor bank on the same day. 

After receiving NACH’s final response via its sponsor bank, the platform updates its records and sends the customer an SMS confirmation.

The SMS message will include the mandate’s UMR number, entity name, account ending last four digits, mandate purpose, and the cancellation date, indicating that the mandate cancellation process has been completed successfully. 

If you need help cancelling an eMandate request, consult the platform’s help or support documentation or contact its customer service team.