The lobby group said small NBFCs
have with great difficulty convinced their customers to use electronic/non-cash means for EMI payments, but still the prevalence of cash repayments is significant.
The provision of the facility for cancellation of NACH mandates therefore is neither feasible nor effective in achieving the ultimate objective of customer empowerment given the nature of these customers.
NACH (National Automated Clearing House) is a funds clearing platform similar to the existing ECS (Electronic Clearing Service). NACH Cancellation request is used to cancel automatic debit from account every month to pay bills like telephone bills, electricity bills, installments, insurance premiums etc.
FIDC said small NBFCs
that operate in limited geographies and provide the vital last mile credit delivery to unserved and under-served segments of the economy including agriculturists, MSME, small road transport operators etc.
Over time, NBFCs have grown in their importance in serving these segments and according to a study carried out by the Boston Consulting Group, serve 70% of “New To Credit” customers, FIDC said.
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