NACH Debit mandates must contain the correct category code for the creditor and/or product. LotusPay assigns your code automatically.
An NACH mandate contains a category code. This code represents the type of payment that will be taken against that mandate. The possible codes are:
- A001 - API mandate - emandate_api variant
- B001 - Bill payment credit card
- C001 - B2B Corporate
- E001 - Education fees (school/college tuition fees)
- F001 - Subscription fees
- I001 - Insurance premium
- I002 - Insurance other payment
- L001 - Loan instalment payment
- L002 - Loan amount security (full amount of the loan taken as security, max Rs 50L amount)
- M001 - Mutual fund payment
- O001 - Own retail portfolio mandate - EMI (only banks may use this code)
- O002 - Own retail portfolio mandate - loan security (only banks may use this code)
- S001 - Small value mandate (max Rs 25k amount, ADHO frequency allowed)
- S002 - Standing instruction
- T001 - Tax payment
- U001 - Utility bill payment electricity
- U003 - Utility bill payment gas supply cos
- U005 - Utility bill payment mobile telephone broadband
- U006 - Utility bill payment water
- U099 - Others (any other purpose)
LotusPay assigns each merchant a default category code upon sign up. We do this by assessing the type of business that you operate. This default category code is then used in mandate creation. Pro merchants can optionally select a category code at the time of mandate creation via API.
NACH Circulars 165 and 165A requires creditors to select the appropriate frequency agreed with the customer for the service/product you are providing them, rather than simply using the As and When Presented frequency for all scenarios. L001 category code should not be used with the frequency Ad hoc (As and When Presented), and many destination banks are now rejecting such mandates (although neither NPCI nor LotusPay will block you from using L001 with ADHO). If a mutual fund customer agrees to ad hoc payments, mandates in M001 category code may use the frequency Ad hoc (As and When Presented).
NACH Circular 277 introduces the category code S001 for small value ad hoc payments. The amount may be less than or equal to Rs 25,000 (as per NACH Circular 2019-20/016), and the frequency may be Ad hoc (As and When Presented).
NACH Circular 2020-21/010 introduces the category code S002 for standing instructions, and allows L002 category code to have amount of Rs 50L for emandate_api variant. This is effective 1st August 2020.