To make cheque transactions safer, the Reserve Bank of India (RBI) has asked all banks to introduce the Positive Pay System effective 01 January 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 ₹50,000 and above. 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 ₹5,00,000 and above.
Positive Pay System enables an additional security layer to the cheque clearing process wherein, the issuer of the cheque submits cheque details as per the process mentioned below. When the beneficiary submits the cheque for clearing, the presented cheque details will be compared with the details provided to the Bank through Positive Pay.
To avail this facility, the account holder (drawer of the cheque) needs to share cheque details at the time of issuance of the cheques for amounts of INR 50,000/- and above.
Cheque details as under:
- Cheque Date
- Name of beneficiary/payee
- Amount
- Cheque number
These details can be submitted by the account holder at the nearest branch by filling a simple Positive Pay form.
- Insufficient and incorrect details may lead to cheque return.
- To enable the validation through Positive Pay, the cheque detail mentioned above should be available with the bank one working day prior to the cheque presentation date.
- Only cheques that are compliant with the Positive Pay System will be accepted under the RBI dispute resolution mechanism between the presenting and paying banks.
- Availing of this facility for cheques amounting to INR 50,000 and above is at the discretion of the account holder. It is recommended that the account holders avail the facility for all cheques of INR 5,00,000 and above.
Note – A customer will be required to register for the facility by submitting an application/ consent at any of your bank branches. Registration for Positive Pay System is NOT MANDATORY. Customers may register for the facility at their discretion.
