Mandate categories

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

• T002 - TReDS

• 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)

Category code in LotusPay source creation

LotusPay assigns each merchant a default category code upon sign up. We do this by assessing the type of business that you operate, or you can specify your desired default category code by emailing support from your registered admin user email address.

You can view your merchant account's default category code in the dashboard by going to Settings > Company Settings.

• Source creation via API: You can specify the category code of each source, else source is created with your default category code.

• Source creation via Import: You can specify the category code of each source, else source is created with your default category code.

• Source creation via Forms: Source is created with your default category code.

NPCI guidelines

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. ADHO (Ad hoc or As and When Presented) frequency should not be used with L001 category code. Several destination banks (including HDFC Bank, Kotak Mahindra Bank, Bandhan Bank) are now rejecting such mandates in all variants (emandate_api, emandate_esign, physical). However NPCI will not restrict you from using L001 with ADHO, and LotusPay similarly gives you full access to the payment system to see the responses from the various destination banks.

Lenders (NBFCs and their fin-tech/channel partners) should take note of these guidelines and use the appropriate frequency and category code e.g. use L001 with MNTH. If you do want to use ADHO frequency, it is at your risk, and you may try doing so by pairing it with another category code e.g. S001 or U099.

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.