NPCI warning to erring Corporates – Only Wet Signatures on NACH Mandates

          NPCI – NACH Department has released a strongly worded circular regarding ‘ Embossing signatures on Mandate Images’.

NACH Circular No 34 dt. November 22, 2018.

          NPCI has noticed that few Presenting Banks / cooperates are indulging  in the following practices:

01)  Embossing the signature of the customer ( cropped from some other document) on the image of the physical mandate.

02) Getting the customer sign on the electronic gadget ( on the surface of the tablet, IPAD) that is used for inputting the mandate details.

Both the above practices are not part of the NACH Procedural Guidelines.  As on date, Wet Signature is mandatory on a NACH Physical mandate.

          Institutions circumventing the rules, bring disrepute to the whole NACH Cycle. All the participating instructions in the NACH Channel, be it Presenting Banks, Corporates, Destination Banks, customers are expected to adhere to the NACH Procedural Guidelines.

          The NACH Procedural Guidelines coupled with the circulars released from time to time, guide the participating institutions for a high success rate.

          The obvious question coming to the mind is, Why are signatures customer’s embossed on the physical mandate.

Reason 01) All the details required for the Mandate are updated electronically and it is a pain to obtain the customer’s signature on the Physical Mandate.

Reason 02) The physical mandate is rejected by the destination bank and it is difficult to obtain the customer’s signature on a fresh physical mandate.

Reason 03) The field staff do not have immediate access to printer and physical mandate stationery. The next best option can be to obtain the customer’s signature on an electronic gadget.

          In case you know any other reason, please do mention in the comment box.

Q 01) How difficult is it for the destination banks to make out if the signature on the physical mandate is ‘Wet’ signature or ‘Embossed’, signature.

          Ans 01) It is not easy for destination bank processing team to make out the embossed signatures. It requires a sharp eye to spot an embossed signature and to  convince other stake-holders on the same.

          Q 02) What reject reason can the destination bank mention where it is found out that customer’s signature is embossed on the physical mandate?

Ans 02)  Ah, a very difficult situation, the best reject reasons can be

a)     M003 -  Drawer signature differs

b)    M004 – Drawer’s signature required

c)     M027 -  Image not clear

d)    M050 – Drawers signature illegible in mandate form

e)    M092 – Signed content does not tally with data mandate

Maybe in the next NPCI NACH steering committee meeting, a new Reject Reason will have to be finalised as :-

AA) Embossed Signature.

To ensure the erring institutions completely desist from the practices of embossing signatures on physical mandates, NPCI will analyse the mandates submitted by the various corporates on an ongoing basis.

In case, NPCI observes the practice still continues, NPCI may take punitive action ranging from imposition of penalty and / or suspending the corporate from participating in the Mandate Management System.

Indeed, it will be a very sad day, if any corporate if suspended from participating in the Mandate Management System.

Now, it is upto the participating Corporates to desist from the practise of embossing signatures on the physical mandates.

This will be more challenging with the eMandates through UIDAI-Aadhaar being suspended.    

        

The word ‘Emboss’ can be mentioned both as a Verb or Adjective.

If mentioned as a Verb, an object is mandatory.

The common usage is as an Adjective, i.e Embossed

The common meaning of ‘Emboss’, is as under:

01)  Carve, mould, or stamp a design on (a surface or object) so that it stands out in relief.

·       ‘an embossed brass dish’

·       ‘the silverware is embossed with falcons’

02) Carve, mould, or stamp (a design) on a surface or object.

·       ‘a dull gold casing with the logo embossed on the front’

Origin: - Late Middle English: from the Old French base of obsolete French embosser, from em- ‘into’ + boce ‘protuberance’.