• Images must be retained for 8 (eight) years.
ELECTRONIC CLEARING SERVICE
• Electronic Clearing Service is a facility of electronically sending payment instructions.
• The objective is to provide an alternate method of effecting bulk payment transactions
which would obviate the need for issuing and handling paper instruments thereby
facilitating customer service
• This service is in operation in 15 centres where clearinghouses are managed by the
Reserve Bank of India and 31 centres where they are being managed by the State Bank of
India and its associates.
• The scheme is designed for high volume transactions and to discourage low volume
• This is further divided into ECS Credit and ECS debit.
• This is a method of payment whereby the institutions having to make a large number of
payments can directly deposit the amount electronically into the bank accounts of those
they need to make the payment to.
• The scheme covers bulk payment transactions like periodic payments of salary, interest,
dividends and the likes and obviates the need to prepare a large number of warrants,
dispatching them by post and reconciling the payments later. Often each individual
payment is of a repetitive nature and of a relatively small amount.
• The system works on the basis of one debit transaction triggering a large number of
• These credits or electronic payment instructions which possess details of the
beneficiaries account number, amount and branch bank are communicated to the bank
branches through their respective service branches for crediting the accounts of the
beneficiaries either through magnetic media duly encrypted or through hard copy.
• Electronic clearing has been facilitated by MICR and the fact that several companies
issue cheques that are payable at par at many locations (such as dividend cheques).
• ECS credit can only be given to customers who have accounts in banks that participate
in this form of settlement.
• The magnetic tape/ floppy is the basis fo