Non-banking finance companies seek easier rules for cancelling NACH mandates

Non-banking finance companies, particularly those with an asset base of less than Rs. 500 crore, have sought relaxation in rules for cancelling National Automated Clearing House mandates by their customers. The Finance Industry Development Council has written to the National Payments Corporation of India “to provide cancellation facility through simpler means such as Whatsapp and SMS” in a secure manner.

In a letter to the NPCI MD & CEO, Dilip Asbe, FIDC has stated this would enable customers to cancel NACH mandates in a simple manner rather than having to access the companies’ websites to carry out such a request.

It has also requested NPCI to allow small NBFCs (with an asset base of less than Rs. 500 crore – which are categorised by the RBI as non-systemically important) to provide such a facility on a ‘best effort’ basis and not as a mandate.

“Most of our members are small NBFCs that operate in limited geographies and provide the vital last-mile credit delivery to unserved and under-served segments of the economy including agriculturists, MSME, small road transport operators,” FIDC stated in the letter, adding that many of these NBFCs are very small and do not have a well-developed website.

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