Simple Definition of EMI and ECS

>> August 19, 2009


Definition of EMI

EMI is the finance term . EMI means easy monthly installments or Equal Monthly Installments because this installment is paid on loan or payment of purchased
product monthly basis according to contract bank or company . When you take personal or house or any other loan from bank . Bank fixes your monthly installment for repayment of his loan after seeing your salary or professional or business income . Interest is included in it as per regulations of RBI and respective bank's terms . So , in finance sector it is known as EMI .


Definition of ECS



ECS is also finance term and it means Electronic clearing service . Reserve bank of India has defined clearly ECS in his FAQ related to ECS . Link

If you want to know ECS , then I try to explain RBI's definition relating to ECS .

Electronic Clearing Service (ECS ) is the system of electronic funds transfer from one bank account to another bank account .

For Example


Suppose , if you are employee in an company and your salary is deposited in bank account . If you have taken bank loan for personal purpose , then you can contact your bank and allow bank to deduct EMI from your salary , then this system of transfer of fund from your account to that bank who gave you loan is called ECS . By taking this facility , you can also pay interest and other bills like telephone or Internet also . Company can also get this facility from bank for automatically payment of dividend , interest , salary and pension on due dates . After revolution of Internet ,Finacle and other bank software can easy tranfer of fund from one account to another . So , providing of ECS facility is most benefited for customers and bank also .






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2 comments:

How to reduce Credit Card Debts September 3, 2009 at 2:52 AM  

Credit Card Loan

"Paying the Price" certainly has meaning when it comes to credit card debt. Most people have good intentions, but for whatever the reason it is becoming increasingly common for cardholders bot to pay their credit card bills. These debts are real and will not go away simply by ignoring the bills. Debt continues to increase each month with interest and finance charges being tacked on to the original purchases. It is quite common for these charges to become larger than the original bills Before throwing in the towel and declaring bankruptcy it is critical that you get into action and start managing your credit card debts by first reducing them.

Anonymous,  August 2, 2012 at 6:30 AM  

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