Brief overview of Electronic Clearing Facility (ECS)

August 4, 2014

ECS RBI launched the Electronic Clearing Service that facilitates crediting the dividend amount electronically to the shareholder/investor’s bank account for the outstanding amount.

This method provides the following benefits to the shareholders/investors:-

Instant credit – Under this system, the dividend amount will be electronically credited to the shareholder/investor’s bank account instantly without any additional charges. ECS will remove the delay in communication through post office as well as deceptive encashment of warrants.
Optional Scheme - This scheme relates to optional Coverage – The investors can access in major cities/centres which range from Ahmedabad, Bangalore, Calcutta, Chennai, Delhi, Hyderabad, Mumbai, Pune. RBI is also expanding this system to several centres sporadically. Presenly, the scheme is applicable only for payments upto a highest amount of Rs 500,000.
Process for credit – In this system, the amount of dividend owed to the shareholders/investors would be directly deposited to their bank account. The concerned branch will credit the shareholder’s account and in the passbook/statement of bank account, the credit entry will be shown as 'ECS' transaction.

If any investor does not receive the ECS facility by the concerned Company/their Bankers at a specific centre or the outstanding amount to them surpasses Rs 500,000, the dividend amount due will be dispatched through a dividend warrant which will be sent by post to the investor’s address with the particulars of the bank/branch and account number submitted by the investor.

To obtain the ECS facility (i.e. direct electronic credit to your bank account), a shareholder/investor has to send a written request to SSIPL providing the following details:

Your folio number
Name and address of the bank branch
Account type and account number
The 9 digit code number of the bank and branch as mentioned on the MICR cheque issued by the bank

This is valid only for securities obtained in physical form. For securities obtained in electronic form, one has to contact with Depository Participant.