As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs, investments in mutual funds, payment of insurance premium etc. There are two types of ECS, like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder, usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund scheme through systematic investment plan (SIP), and every month a fixed amount of money goes out of your bank account, it must be through the ECS debit process.This could be used for payment of utility bills like electricity, telephone etc.