NATIONAL ELECTRONIC CLEARING SERVICE – CREDIT SERVICES

(TO BE FRANKED ON RS 100 STAMP PAPER)

Definitions
National Electronic Clearing Service system introduced by Reserve Bank of India (RBI) for
NECS electronic fund transfer within India. The objective of the system is to facilitate centralized
processing for repetitive and bulk payment instructions.

Customer ________________ (Please insert the name of the Corporate), which shall use the NECS services
for bulk payments.

DBS Bank Ltd., which shall act as the agent of the Customer to upload the user data on the
Sponsor Bank
webserver of RBI/Clearing House.

Destination Account Holders

Beneficiaries holding accounts with Destination Bank Branches who have opted to avail NECS
facility by way of direct credit to their account.

Destination Bank Branches

Bank branches where the Destination Account Holders maintain their bank accounts.

MICR Code of the destination branch wherein the Destination Account Holder maintains his
Destination Sort Code account

Funds given back to the Sponsor Bank by Destination Bank Branch as the credit could not be given
to the specified account of the Destination Account Holder.
Return funds

Letter issued by the Customer to the Sponsor Bank from time to time authorizing the Sponsor Bank
to debit its account with the Sponsor Bank and credit accounts of the Destination Account Holders
NECS Request Letter cum Debit Authority Letter
through the NECS.

NECS Credit File

Format of credit file as prescribed by RBI under NECS submitted to the Sponsor Bank.
Execution Date
Date of settlement communicated by RBI for processing the NECS Credit Input File.

Days on which banks participating in RTGS/NEFT are functioning on all RTGS/NEFT working
Business Day
days. Banks participating in NECS would also function on these working days.

General Terms
RIGHTS AND OBLIGATIONS a. The Bank shall execute the NECS Request issued by the Customer except in following conditions:
OF THE BANK
1. the funds available in the Customer Account are not adequate or properly applicable to comply with
the NECS Request Letter / NECS Credit File and the Customer has not made any other arrangement
to meet the payment obligation,
2. the NECS Request Letter cum Debit Authority is incomplete or it is not issued in the agreed format or
the NECS Credit File is not in the format as prescribed by RBI.
3. Breakdown of NECS systems

b. The Bank shall endeavour to credit the Return Funds to the Customer Account within one (1)
Business Day from the Execution Date.
However, the time taken for such return of funds shall solely depend on receipt of funds and data from RBI
and the Destination Banks Branch. The Bank shall not be liable for any delay in return of funds for
whatsoever reason.

GENERAL UNDERTAKING The Bank shall not modify the NECS Credit File under any circumstances and shall not be liable in case of any
FROM CUSTOMER discrepancy in the NECS Credit File.
a. Customer hereby agrees and confirms that it fully understands that, the Bank will be able to
provide NECS Credit facilities to the Customer only for those banks that participate in NECS
Credit Clearing. For banks other than the participating banks, Customers hereby agrees and
undertakes to make alternate arrangements.
b. Customer hereby agrees to provide the NECS Credit File as per the prescribed format specified
by RBI from time to time. The Customer shall ensure the accuracy of the data in the NECS
Credit File. Customer may send the file via encrypted email or in a diskette. The Sponsor Bank
shall not be liable in case of any data tampering during receipt of emails. (.
c. In case of any discrepancy in the data provided by the Customer, the Customer shall be solely
responsible for any financial loss and/or damages suffered, liabilities and/or penalty incurred,
interest accrued for non-payment, wrong payment or delayed payment. The Customer shall not
hold the Bank responsible or liable for any direct or indirect financial loss and/or damages,
liabilities and/or penalties incurred by the Customer arising out of availing this service.
d. Customer hereby agrees to provide latest and correct account numbers of the Destination
Account Holders in the NECS Credit File shared with the Sponsor Bank.
e. Customer hereby agrees to weed out repeatedly returning transactions from the NECS Credit File
shared with the Sponsor Bank.
f. Customer shall pay service charges as prescribed by the Sponsor Bank.
g. Customer undertakes to ensure that the NRE accounts of the Destination Account Holders, if
any, will be included in the NECS Credit File only after ensuring that such funds are eligible to
be credited to Non Resident (External) (NRE) accounts in India under the existing Foreign
Exchange Management Act (FEMA) Regulations and Wire Transfer Guidelines. The Customer
shall submit such documentary proof to the satisfaction of the Sponsor Bank to ensure that the
funds are eligible to be credited to NRE accounts under the existing FEMA Regulation and the
Wire Transfer Guidelines.

RIGHTS AND OBLIGATIONS The Customer hereby agrees to provide the NECS Request Letter cum Debit Authority either in original or
OF THE CUSTOMER alternatively via fax. In case of fax, Customer hereby warrants and represents that the Customer has
executed a fax indemnity in writing in favour of the Bank in the form and manner acceptable to the Bank.

a. The Customer shall be required to issue the NECS Credit File alongwith the NECS Credit
Request Letter cum Debit Authority not later than the agreed cut-off date and time subject to
change from time to time. Where the NECS Credit File and the Request Letter are not received
prior to the agreed cut-off date and time, the Sponsor Bank shall be entitled to postpone the
payment execution by one Business Day, irrespective of the Execution Date mentioned on such
NECS Request.
b. The Customer shall ensure that each NECS Credit File and Request Letter under this Agreement
shall at all times be issued by an authorized person.

The NECS service hereunder shall continue in force till such time the Sponsor Bank or the Customer
TERM issues a termination notice for termination of this arrangement. The Sponsor Bank and the Customer
shall give a notice of at least 30 days for termination of this arrangement.

GOVERNING LAW &

This arrangement shall be subject to Indian law and the courts in Mumbai, India shall have jurisdiction
JURISDICTION
under this arrangement.

DISPUTE RESOLUTION
In cases of any dispute arising out of this arrangement, the same shall be subject to the directives on
Dispute Resolution mechanism issued by the Reserve Bank of India. However, the Sponsor Bank shall
not be responsible for handling complaints received from each Destination Account Holders. Complaints
if any received from the Destination Account Holders shall be handled by the Customer directly.