Mumbai: The ‘Positive Pay’ system for cheque transactions above Rs 50,000 came into force on January 1. The Reserve Bank of India (RBI) has decided to implement it to enhance safety of cheque-based transactions.
So what is the Positive Pay system?
It’s a process of reconfirming important details of large-value cheques, The Quint has explained in an article. The issuer submits the cheque electronically — through SMS, mobile app, internet banking, ATM — certain details of that cheque like date, name of beneficiary, name of payee, amount, etc to the drawee bank.
The details are cross-checked with the presented cheque by Cheque Truncation System (CTS).
If any discrepancy is noticed, CTS flags the drawee bank and presenting bank, who will then take redressal measures.
RBI Governor Shaktikanta Das, while announcing the new system on August 6 this year, had said that it will enhance security and reduce instances of tampering cheque leaves.
The system will be enabled for all account holders who issue cheques for amounts of Rs 50,000 and above.
Availing this facility is the choice of the account holder, but banks might make it mandatory for cheques amounting to Rs 5,00,000 and above.
Banks have been advised to create awareness among customers on the features of Positive Pay System through SMS alerts, display in branches, ATMs and through their website and internet banking.
