As we move towards new ways of growing our assets, we need to familiarise ourselves with the new processes they involve. There is a need to understand e-mandate and what OTM (one-time mandate) is, especially when investments in SIPs become commonplace. Even if these terms sound a bit complicated, you must have used these services when you validated your favourite OTT platforms to debit money from your account at specific intervals. Several banks and government services take care of these processes during critical stages to ensure your transactions are safeguarded against breaches.

• OTM is required for the e-mandate process that you register with the fund house.
• The e-mandate, thus authenticated by you, is then validated by the destination bank, the NPCI, and the sponsor bank.
• OTMs help you invest regularly and timely, thus maintaining discipline.

Banks supporting e-mandate and OTM are listed in two categories: sponsor and destination banks. The destination banks are the ones you have your account in, and the sponsor banks are the ones that take part in the authentication process of the e-mandate, along with government agencies like the National Payments Corporation of India (NPCI).

• Sponsor banks: All the major private banks are on this list, e.g. Kotak Mahindra Bank, Axis Bank, HDFC Bank, ICICI Bank, Indian Bank, IndusInd Bank, etc.
• Destination banks: Private banking entities like Federal Bank, Utkarsh Small Finance Limited, UCO Bank, Ujjivan Small Finance Bank Limited, etc., are on this list.

You can find the entire list of sponsor and destination banks on the NPCI website, as well as the current status of relevant services, i.e., net banking, debit card, and Aadhaar. Check if the status indicated is ‘live’ against the services of your bank, and proceed likewise.

OTM (one-time mandate) refers to the permission you grant to your bank through an e-mandate to automatically invest a specified amount into your SIP (Systematic Investment Plan). Here are the key benefits of OTM:

• Automatic debit: You don’t need to authenticate the debit of funds for every SIP, ensuring timely investments.
• Payment reliability: OTM reduces the risk of payment gateway failures, which can be frustrating during important payments.
• Multiple SIPs: You can link multiple SIPs under a single OTM, though you must ensure not to exceed the stipulated maximum investment limit.
• Investment discipline: OTM encourages more disciplined investing as the automated process removes the risk of human error or delays.

Let us now take a look at the workflow of the e-mandate to better understand how the process works.

• Start by registering your bank details with the fund house. At this stage, you need to provide key information such as your account number, frequency of debit, and the amount to be invested.
• Ensure that your bank is registered with the NPCI (National Payments Corporation of India). Your fund house verifies this information after you submit the details.
• You will be redirected to the NPCI page, where you log in to your net banking account and validate the transaction. This process is completed with the support of sponsor banks and relevant entities integrated with NPCI.
• Your bank verifies the submitted details and presents you with the option to accept or reject the debit for the specified amount.
• Once you accept, you will be redirected back to the NPCI page and then to the fund house’s website for final confirmation that the e-mandate setup has been successfully completed.

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