 "Can you trust your bank to run your ECS on time?")
They say if you have repeated regular payments to make, for instance paying your home loan EMI or insurance premium, it’s best to set an ECS mandate with the bank, instead of cutting post dated cheques. After all setting an ECS can make money matters a bit simple, you don’t need to keep remembering due dates for various payments, and it’s pretty much a set it and forget it deal, as long as you have enough balance maintained in the account. But, as Edward Aloysius Murphy, famous for his Murphy’s law once said, “Anything that can go wrong, will go wrong.” And banks too make mistakes when it comes to your ECS payments.
Picture this:
You have a credit card from a bank and you set an ECS on the same towards making a payment of premium towards your family heath insurance policy. Now you are planning a long trip overseas and want to ensure that your insurance premium gets paid on time and hence you set an ECS mandate with the credit card company to allowing it to debit your savings bank account for remitting any future premiums. Hoping all will be taken care by the bank, you think you need not worry about remembering the insurance premium due date. But though the ECS mandate was set into action, your bank fails to make the payment and you lose you insurance cover, due to a missed payment.
[caption id=“attachment_1095107” align=“alignleft” width=“380”]  So, what can you do, to ensure that your ECS runs on time and your bank does not goof-up? Reuters[/caption]
It happened for real: If you think this is an imaginary situation, think again. The above example comes from the Reserve Bank of India’s banking ombudsman office. In fact, such a thing actually happened to a card holder and he finally approached approached the banking ombudsman. “The Banking Ombudsman observed that the deficiency on the part of the bank was established and ordered to compensate the complainant with a sum of Rs 30,000 being the estimated difference between the premium in the normal course for the left over period of the policy and the additional premium to be paid for the new policy.” said the RBI document.
What can we learn: The truth is that more often that not, banks do get the ECS part correct. But, banks could make mistake like this, after all it did happen to the customer mentioned above as per RBI data. So, what can you do, to ensure that your ECS runs on time and your bank does not goof-up? First, ensure you monitor you accounts regularly. Secondly, enroll for the bank’s SMS service, where you get information about the activity on your account via SMS. So, every time an ECS is cleared, you get an SMS. A few banks have started charging a small fee for this service but it’s worth it. And finally, remember that when you bounce an ECS from your side, you are charged a penalty which is same as the bank charges for a bounced cheque. So, whatever reason, if your bank fails to run your ECS, do take that matter up with your bank or bank’s nodal office or even the banking ombudsman, if need be.
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