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In a communication to scheduled commercial banks, the
apex bank has told them not to insist on customers withdrawal
instructions in ECS like ''stop payment'' to be routed
through user institutions.
''Several instances have been brought to our notice
where bank branches are showing reluctance in accepting
customers request to withdraw the ECS mandate given
earlier to the user institution and the bank.''
Banks are insisting on the withdrawal instructions
to be routed through the user institution, it said.
While the customer should be in a position to exercise
choice to withdraw from service in a user friendly way,
the withdrawal instructions of a customer need to be
treated equivalent to a stop payment instruction in
cheque clearing system.
The customer can simultaneously send an instruction
to the 'user institution' so that it stops including
the transaction in the ECS file.
Thus, for action on the withdrawal instruction by
the bank branches, it is not necessary for the bank
branch to obtain a confirmation from the user institution,
the Central bank observed.
The user institution is not supposed to include transaction
in the ECS file on receipt of withdrawal notice. For
any reason, if the transaction gets included in the
ECS file, it may be dealt in a way 'stop payment' instructions
are handled in the cheque clearing mechanism, the RBI
said.
The volume of ECS transactions both in Debit Clearing
and Credit Clearing has been growing rapidly. The growth
rate of Debit Clearing transactions is much larger than
the Credit Clearing and many utility companies have
evinced a lot of interest in utilising the system for
collection of utility bills.
As far as the user institution is concerned, RBI said,
it is obligatory on their part not to include the transaction
in the ECS input file provided withdrawal instruction
is received 15 days prior to the date of submission
of ECS file to the ECS clearing mechanism.
Bank branches may take up the matter with utility
organisations if they observe that transactions are
included in the ECS file repeatedly even after the withdrawal
instruction.
A complaint can also be lodged with the Clearing House
if the user institution keeps including the ECS transaction
even after being pointed out by a bank branch, RBI added.
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