What Are the ECS Charges for a Loan Against Property

Electronic Clearing Service (ECS) allows your loan against property (LAP) EMI to be collected automatically from your bank account through an authorised mandate. If the deduction fails, the EMI may remain unpaid, and bounce charges or penal charges may apply under your loan terms.

• Bajaj Finance’s published loan-against-property fee schedule lists bounce charges of Rs. 1,500 per bounce, covering an instalment unpaid on its due date because the payment mandate failed or was not registered.
• The charge applies per bounce, so two failed deductions would total Rs. 3,000, before any unpaid EMI or penal charges.
• Insufficient funds, mandate issues, incorrect bank details or a transaction problem can cause a deduction to fail.
• Check your bank statement and loan account, then pay any overdue amount through an authorised channel.
• Penal charges are separate from bounce charges. Check your loan agreement and the current fee schedule.

If your bank debited the EMI but your loan account shows it unpaid, keep the transaction reference and contact Bajaj Finance.

ECS bounce charges may apply when an authorised EMI deduction fails, depending on your loan terms and the applicable fee schedule. Bajaj Finance’s published fee schedule lists a charge of Rs. 1,500 per bounce for a loan against property. ECS enables automatic EMI collection from your bank account through an authorised mandate. If the deduction fails, the scheduled EMI may remain unpaid, and the applicable charges may increase your outstanding dues. Common reasons for failure include insufficient funds, mandate-related issues, incorrect bank details or transaction problems. The total amount payable depends on the unpaid EMI, applicable bounce charges, any penal charges and other outstanding dues under your loan terms. These charges are separate from the original EMI amount. To understand the amount applicable to your account, review your loan statement, agreement and the official fee schedule. If the charge or failed transaction is unclear, contact Bajaj Finance through an authorised channel for clarification. Addressing the failed deduction promptly can help you resolve the overdue amount and reduce the risk of repeated payment failures.

What are the common reasons for ECS payment failure?

An ECS payment can fail when the bank cannot complete the authorised deduction from your account. Identifying the reason helps you address the problem and reduce the risk of further failed payments.

Common reasons include:

• Insufficient funds: The available balance may be lower than the EMI amount when the deduction is attempted.
• Mandate-related issues: The ECS mandate may be inactive, unregistered, cancelled or otherwise unable to support the transaction.
• Incorrect bank details: Errors in the account information provided for the mandate may prevent the deduction.
• Bank or transaction problems: A technical issue or a bank-side processing problem may interrupt the payment.
• Account restrictions: A restriction on the bank account may prevent the scheduled debit.

Check the failure message or bank statement to identify the reason. If the cause is unclear, contact your bank or Bajaj Finance through an authorised channel before the next EMI due date.

ECS bounce charges can increase the amount you need to pay beyond the overdue EMI. The total may also include other applicable charges, depending on your loan agreement and the circumstances of the missed payment. For example, if the applicable bounce charge is Rs. 1,500 and two chargeable transactions fail, the bounce charges would total Rs. 3,000. This is an illustration, not a guarantee of the amount that will be charged to every loan account.

The following example shows how bounce charges can add up if more than one ECS transaction fails.

Note: This example assumes that the published Rs. 1,500 charge applies to each of the two failed transactions. It covers bounce charges only and excludes unpaid EMIs, any applicable penal charges, and other amounts due under the loan terms. Your actual charges may differ.

What should you do after an ECS deduction fails?

If an ECS deduction fails, check the reason, confirm the amount due and arrange payment through an authorised channel. Taking action promptly can help you address the overdue amount and reduce the risk of repeated payment failures.

Follow these steps:

1. Check your bank statement. Confirm whether the EMI was debited, rejected, or returned. Note the transaction date and reference, if available.
2. Review your loan account. Check the EMI status, overdue amount, and any bounce or penal charges displayed.
3. Confirm the amount payable. Review your loan agreement and applicable fee schedule. Contact Bajaj Finance if you need clarification about a charge or the outstanding amount.
4. Pay through an authorised channel. Use a payment method officially provided or recognised by Bajaj Finance. Check the payment status after completing the transaction.
5. Resolve the underlying issue. If the failure resulted from insufficient funds, ensure that sufficient funds are available before the next scheduled deduction. If the mandate or bank details are the problem, contact the relevant bank or Bajaj Finance to understand the correction required.
6. Keep payment records. Retain the transaction reference, receipt, bank statement and any complaint reference until the payment and account status are resolved.

If the bank has debited the EMI but your loan account still shows it as unpaid, do not assume that the payment has been reconciled. Share the transaction details through an authorised support channel and request confirmation.

You can reduce the likelihood of ECS failures by maintaining sufficient funds, checking your mandate details, and reviewing your loan account regularly. These steps cannot prevent every bank-side or technical issue, but they can help you identify problems before they lead to repeated failed deductions.

• Maintain sufficient funds: Keep enough money in the linked bank account to cover the scheduled EMI.
• Check mandate status: Confirm that the mandate is registered and active, and that the linked account details are correct.
• Review bank alerts: Pay attention to debit notifications and messages about failed transactions.
• Monitor your loan account: Check whether each EMI has been recorded as paid and whether any overdue amount remains.
• Update account details correctly: If you change your bank account, follow the required process to update or register the mandate. Changing the bank account alone does not necessarily update an existing mandate.
• Keep records: Save payment confirmations and transaction references so you can resolve discrepancies more easily.

If your mandate needs to be changed or registered again, contact Bajaj Finance through an authorised channel and follow the applicable process. Until the new arrangement is confirmed, continue to monitor your repayment obligations and use an authorised payment method if an EMI remains due.

How do penal charges and RBI requirements affect overdue EMIs?

Penal charges may apply when a borrower does not meet a material term of a loan agreement, including an applicable repayment obligation. These charges are distinct from ECS bounce charges, so you should check the basis of each charge listed against your loan account.

The Reserve Bank of India (RBI), in its circular Fair Lending Practice – Penal Charges in Loan Accounts dated 18 August 2023, set out requirements for penal charges imposed by regulated entities. The framework provides that:

• A penalty for non-compliance with material loan terms should be treated as a penal charge, rather than being added to the interest rate as penal interest.
• Penal charges should be reasonable and proportionate to the relevant non-compliance, and should follow the lender’s approved policy.
• Penal charges should not be capitalised, meaning that no further interest should be calculated on those charges.
• The applicable amount and reason for penal charges should be disclosed to borrowers in the loan documentation and through the lender’s prescribed disclosures.

The RBI framework does not mean that every failed ECS transaction automatically attracts the same penal charge. The charge depends on the applicable loan terms, the nature of the non-compliance and the lender’s policy. Bajaj Finance’s published loan-against-property fee schedule lists a penal charge of 36% per annum per instalment, calculated from the instalment due date until full payment, subject to the applicable product terms. This is separate from the listed ECS bounce charge. Check your specific loan agreement and the current official fee schedule to confirm whether and how the charge applies to your account. If you believe a charge has been applied incorrectly, review your loan statement and documents, then raise a query through an authorised Bajaj Finance support channel.