NACH is a centralized web-based clearing service developed by the National Payments Corporation of India to allow interbank, large volume, low value, periodic electronic transactions. It is designed to combine numerous ECS systems that were operating across the country. It also provides a framework for the harmonization of standards & practices and removes local barriers/inhibitors and, is expected to cover the entire core banking enabled bank branches, spread across the geography of the country, irrespective of the location of the bank branch.

The fundamental function of the NACH system is to initiate bulk transactions towards the distribution of subsidies, dividends, interest, salary, pension, etc.