Positive Pay System For Cheque Payments To Be Introduced From Jan 1; All That You Need To Know

Under the new rule, the key details in the cheque will require re-confirmation for payments beyond ₹50,000.

Cheque Payment Rule: With a view to prevent fraudulent activity, the Reserve Bank of India (RBI) had introduced the 'positive pay system' for cheque payment a couple of months ago. This new cheque payment rule will come into effect from 1 January 2021. The announcement was made by RBI Governor Shaktikanta Das in August to ensure consumer safety and to lower the cases of fraud and abuse with respect to cheque payment. What’s Positive Pay? Under the new rule, the key details in the cheque will require re-confirmation for payments beyond ₹50,000.  It has been designed to detect fraudulent activity. The tool helps in matching specific information related to the cheque given for clearance, like the cheque number, cheque date, payee name, account number, amount, and other details against a list of cheques previously authorized and issued by the issuer. Here’s what you should know about the new cheque payment rule. Basically, the new process involves reconfirmation of key details of large value cheques. This has provided an additional layer of security to the instrument. The cheque issuer will furnish certain details of the cheque including of the beneficiary/payee, amount, electronically via channels like SMS, mobile app, internet banking, ATM, to the drawee bank. All such details will be cross-checked with the presented cheque by CTS. Discrepancies, if any, are flagged by the CTS to the drawee bank and presenting bank, who would then take redressal measures. The facility is being developed by National Payments Corporation of India (NPCI) in CTS.  They will also make this available to participating banks. In turn, these banks shall then enable it for all account holders issuing cheques for amounts of Rs 50,000 and above. Is it mandatory for all account holders? The facility will be at the discretion of the account holder, but banks may consider making it mandatory in case of cheques for amounts of Rs 5,00,000 and above. For any dispute resolution mechanism at the CTS grids, only those cheques which are compliant with this system will be considered. Member banks are also free to implement similar arrangements for cheques cleared/collected outside CTS as well. Banks have been told to create awareness among their customers on the features through SMS alerts, display in branches, ATMs as well as through their web-site and internet banking.