RBI introduces Positive Pay cheque system in banks; Check out important points

To enhance safety of cheque payments, the Reserve Bank of India (RBI) in August had said that it has decided to introduce a mechanism of 'Positive Pay' for all cheques valued Rs 50,000 and above.

'Positive Pay' is a fraud prevention system that provides additional layer of security on the instrument to prevent forgery or any other alterations. This is offered by the banks to certain corporates dealing in high value check transfers.

Making announcement of the proposed introduction of the new mechanism, RBI Governor Shaktikanta Das had said that it will cover approximately 20 per cent to 80 per cent of the total cheques by volume and value, respectively.

"Operational guidelines in this regard will be issued separately," Das said.

Check out the key featur about the new rule for cheque payments:

1.Under this process, the issuer of the cheque will submit certain minimum details of that cheque like date, name of the beneficiary / payee, amount, etc. to the drawee bank electronically, through channels like SMS, mobile app, internet banking, ATM, etc.

2. National Payments Corporation of India (NPCI) shall develop the facility of Positive Pay in the Cheque Truncation System (CTS) and make it available to participant banks. Banks, in turn, shall enable it for all account holders issuing cheques for amounts of ₹50,000 and above.

3. The details will be uploaded by the bank’s system into the centralized data system of Positive Pay. When the cheque is received by the bank, it will verify the details from the central database and make the payment if the details which the account holder has provided match those on the cheque. In case of a mismatch, the bank will reject the cheque.

4. Although availing this facility is at the discretion of the account holder, banks may consider making it mandatory in case of cheques for amounts of ₹5,00,000 and above.

5. RBI has advised banks 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.