New Delhi: With a view to check on cheque-related frauds, the Reserve Bank of India (RBI) has asked banks to implement a system called Positive Pay from January 2021, a system that will add an extra layer of security. However, it is optional for banks to implement the system mandatorily or leave it to the customer’s discretion. Also Read | SBI Update: Did You Know Cheque Book Can Be Delivered To Any Address Of Your Choice? Check The Steps Here


In its notification, the central bank said, “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 lakh and above.  The Positive Pay facility is being developed by the National Payments Corp. of India (NPCI).

The will help in preventing cheque frauds where the cheque leaf and signature are genuine but a fraudster alters cheque details.

What you need to know?

You have to share the details of the cheques you issue with the bank, but before clearing the payment against the cheque, banks will match the details on the cheque with those provided by the customer.

After that the issuer of the cheque will submit the details electronically, through channels such as SMS, mobile app, internet banking, ATM and so on. In fact, certain banks such as IDBI Bank have already started encouraging customers to use this feature.

As per the ICICI Bank, customers can update details of cheques via IDBI Bank’s GO Mobile+ app.

Here the customer have to give details including the name of the person or organization to whom the cheque is issued, the amount, the cheque number and the date of issuance.

Once the details are shared, the banks’ system will upload the data into a centralized data system. The bank will then verify the cheque details from the central database. With the help of the system banks can authenticate the cheque twice, once by matching the signature of the issuer and then cross checking the details.

Should you opt for it?

Although cheques have security features such as watermark, logo, pantographic image, serial number, account number and features that are not visible under normal light conditions.

This feature will help in fraud prevention as it will work as insurance for customers. In case you have shared the details of the issued cheque and the bank still clears a fraudulent cheque, it will be the responsibility of the bank.

Mostly banks don’t agree to fraud if the signature and cheque leaf are genuine. Also if a beneficiary alters the cheque, banks blames it on the account holder’s negligence.

Remember, if the bank doesn’t make the Positive Pay system mandatory, you should still opt for it to steer clear of any banking fraud.