Digital payments and settlements network operator National Payments Corporation of India (NPCI) on Monday said it has recently migrated its systems to scale its NACH infrastructure.
The redo resulted in “initial teething issues such as delay in settlement,” NPCI said in a statement. It is currently working with bank and fintech partners to sort out any unresolved pendency, having fixed early issues.
The migration was a planned activity, NPCI added.
NPCI’s National Automated Clearing House (NACH) NACH, built for high volume transactions, lets banks or financial institutions automatically debit fixed amounts towards recurring payments such as payment of premium on loans and insurance, easy monthly instalments, utility bills, and mutual funds.
“Unfortunately our migration coincided with the regulatory rule effective February 1, that Net Asset Value (NAV) should be realised only after the funds received by the mutual Funds,” the statement said.
Late December, Securities and Exchange Board of India (SEBI) had notified of new rules on NAV applicability for mutual fund schemes.
It had said that investors would get NAVs only once the money reaches the fund house irrespective of the investment amount from February 1. Prior to the new rule, investors got the same day NAV if they invested amounts within a Rs 2 lakh cap, before a cut off time.
“NACH has started an exclusive clearing session for mutual funds since February 1, 2021, which will support the regulatory objective to pass on funds on the same day and help banks and the ecosystem for better compliance. We regret this unwarranted inconvenience caused to the investors and would work towards providing the best of payment experience,” NPCI added.
Incorporated as an initiative of the Reserve Bank of India (RBI) and Indian Banks' Association (IBA) in 2008, NPCI works as an umbrella organization for operating retail payments and settlement systems in India.
Late last year, it completed a private placement of 4.3% of its equity shares to raise Rs 81.64 crore, after having made an offer to 131 RBI-regulated entities, of which 19 accepted, becoming shareholders of the umbrella organisation.
NPCI’s products include RuPay card, Immediate Payment Service (IMPS), Unified Payments Interface (UPI), Bharat Interface for Money (BHIM), BHIM Aadhaar, National Electronic Toll Collection (NETC Fastag), and Bharat BillPay.