NACH (National Automated Clearing House)
NACHA bulk payment system operated by NPCI in India for repetitive and periodic transactions such as salary credits, dividend payments, EMI debits, and utility bill collections.
National Automated Clearing House (NACH) is India's bulk-payment rail. It runs in two flavours: NACH Credit, used for one-to-many disbursements such as payroll and dividends, and NACH Debit, used for one-to-many collections such as loan EMIs, SIP investments, and utility bills. Files are submitted in a standard format with mandate references, and settlement happens in batches managed by NPCI.
Reconciliation of NACH activity has two distinct surfaces. On the originating side, the corporate must match the file submitted to the actual debits/credits posted, accounting for returned items (insufficient balance, mandate inactive, account closed) which come back as separate return files with reason codes. On the receiving side, banks must allocate incoming NACH credits to the right customer accounts.
NACH return-code mapping is a recurring reconciliation pattern: each return code has business implications (a one-off bounce vs a structural problem with the mandate) and the system needs to track the full history per mandate to drive collections operations.