Reserve Bank of India (RBI) has allowed investors of its Retail Direct Platform to use the National Automated Clearing House (NACH) facility to make investments.
“Once an investor chooses NACH as the payment option while placing a bid, the investor need not log in again for making payments. The investor’s account will be debited automatically for the placed bids on the specified date. Investors can continue to earn interest for the money lying in the account till the debit date. NACH also provides for higher payment limits up to Rs 1 crore,” RBI said in an email sent to RBI Retail Direct customers.
Also read: How can NRIs open an RBI Retail Direct Account
Do note that there is a time lag of two days from the creation of a NACH mandate and when the investor’s bid will go through.
Time taken to invest: Before NACH came into existence as an additional payment option on RBI Retail Direct, an investor had to place the bids and his/her preferred price and pay using UPI/Net-banking immediately. If the bid price was accepted in the auction cut-off investors would get successful allotment after the auction date was over. Otherwise, if the allotment was not successful the money so paid would be refunded. In NACH mandate-type payments money would only be deducted two days before the auction date. Until the time two days before the auction date comes, the money would stay in the bank account of the individual.
RBI in its email said, “Successful Payment confirmation with intimation of that amount will debit from your bank account two days prior to the auction date.”
Time taken to log in: The RBI has clarified that once the bid is placed and the NACH mandate is set-up and is used for paying for the