Positive pay system for cheque kick in from January 1: Know what it is and what the benefits are

Representational Image/PIXABAY

New Delhi: The positive pay system for cheque has kicked in from Friday (January 1, 2021)

In a bid to check banking fraud, the Reserve Bank of India had a couple of months ago decided to introduce the ''positive pay system'' for cheque, under which re-confirmation of key details may be needed for payments beyond Rs 50,000.

While availing of this facility is at the discretion of the account holder, banks may consider making it mandatory in case of cheques for amounts of Rs 5 lakh and above.

Here is all you want to know about Positive Pay System

• Positive Pay System has been implemented from January 01, 2021.
  
• The concept of Positive Pay involves a process of reconfirming key details of large value cheques.
  
• Under this process, the issuer of the cheque submits electronically, through channels like SMS, mobile app, internet banking, ATM, etc., certain minimum details of that cheque (like date, name of the beneficiary / payee, amount, etc.) to the drawee bank, details of which are cross checked with the presented cheque by CTS.
  
• Any discrepancy is flagged by CTS to the drawee bank and presenting bank, who would take redressal measures.
  
• National Payments Corporation of India (NPCI) shall develop the facility of Positive Pay in CTS and make it available to participant banks.
  
• Banks, in turn, shall enable it for all account holders issuing cheques for amounts of Rs 50,000 and above.
  
• Only those cheques which are compliant with the instructions will be accepted under dispute resolution mechanism at the CTS grids.
  
• Member banks may implement similar arrangements for cheques cleared / collected outside CTS as well.

Banks have been advised by RBI to create adequate awareness among their customers on features of Positive Pay System through SMS alerts, display in branches, ATMs as well as through their web-site and internet banking.