ECS Debit – Return Reasons

ECS Debit – Return Reasons

It is observed that the number of ECS Transactions being RETURNED by the Destination Banks are  on the increase.

Your ECS Debit transaction can be rejected by your Banker for the following reasons

As per RBI’s Electronic Clearing Service (Debit Clearing) Procedural Guidelines, the following are the Standard Return Reasons.

Code No.        Reasons for Return

1.                    Account since closed / transferred

Explanation: - Account since closed – The destination account has been closed. Obviously, this has to be returned.

Account Transferred: This reason was valid in a de-centralised environment, when the ECs transactions were being routed to the base branch.

However, under CBS this is a very sparingly used Return Reason.

2.                    No such account:

Explanation: The account number in the ECS Transaction is not in the Destination bank’s books.

Potential causes: The customer’s account has been migrated to the CBS domain, and a new number allotted. However, the ECS transaction is still coming with the old Account number.

3.                    Account description does not tally

Explanation: The account holder’s name in the destination bank and the account holders name in the ECs transaction do not match.

This is a very rare reason, as the Account description is tallied at the time of the Mandate Acceptance by the Destination bank.

4.                    Balance insufficient

Explanation: Simple, inadequate balance to debit the ECS transaction amount. It is to be noted, that there should be sufficient balance at the time of the debit, and not during the business day. For eg: When the destination account is debited with the ECS transaction at 11.30am, 14/07/2010, sufficient balance should be there. It is of no use, if there was sufficient balance at 10.00am or 2.00pm on the same day.

5.         Not arranged for / exceeds arrangements

Explanation: This reason is used for Overdraft Accounts, where the drawn balance exceeds the available balance.

6.         Payment stopped by drawer

Explanation: The destination account holder has instructed his/her banks for  Stop Payments of the Particular ECS Transaction.

Potential causes: Dispute between the account holder and the Beneficiary. Loan account is closed, but still the ECS transactions are being routed.

7.         Payment stopped under court orders

Explanation: The message is clear, Payment stopped under court orders

8.         ECS mandate not received

Explanation: The Destination bank has not received the ECS Mandate.

ECS Mandate is the Debit Authorisation by the customer to the bank.

9.                    Miscellaneous (to be specified)

Explanation: Ah, this is the most exciting or treacherous Return Reason

Will explain in detail in tomorrow’s post