Positive Pay System for Cheque Truncation System

Under the positive pay system, the issuer of the cheque is going to be required to submit electronically, through SMS, mobile app, internet banking or ATM certain minimum details of that cheque like date, name of the beneficiary, payee, amount to the drawee bank.

so as to see banking fraud, the reserve bank of India has decided to introduce from January 1, 2021, the ‘positive pay system’ for cheque, under which re-confirmation of key details could also be needed for payments beyond Rs 50,000.

Availing of this facility would be at the discretion of the account holder.

However, banks may consider making it mandatory just in case of cheques for amounts of Rs 5 lakh and above.

Under the positive pay system, the issuer of the cheque is going to be required to submit electronically, through SMS, mobile app, internet banking or ATM certain minimum details of that cheque like date, name of the beneficiary, payee, amount to the drawee bank.

These details are going to be cross-checked before the cheque is presented for payment. just in case any discrepancy is flagged by cheque truncation system (CTS).

To the drawee bank and presenting bank, redressal measures would be undertaken, the RBI said. The National Payments Corporation of India (NPCI) will develop the power 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 Rs 50,000 and above. While availing of this facility is at the discretion of the account holder, banks may consider making it mandatory just in case of cheques for amounts of Rs 5,00,000 and above,” the RBI said.

The positive pay system is going to be implemented from January 1, the central bank said.

It added that the “banks are advised to make adequate awareness among their customers on features of a positive pay system through SMS alerts, display in branches, ATMs also as through their website and internet banking”.

The RBI further said only those cheques that are compliant with positive pay system instructions are going to be accepted under the dispute resolution mechanism at the CTS grids.

Banks, however, are going to be liberal to implement similar arrangements for cheques cleared and picked up outside CTS.

Similar Articles

Sometimes talking gives solution

Contact us for more information about our services and how we can help

Contact
Disclaimer

As per the rules of the Bar Council of India, we are not permitted to advertise or solicit work. By accessing and browsing through this website, all users agree and acknowledge that the content of this website is for informational purposes only and that there has been no form of solicitation, advertisement or inducement by NovoJuris Legal or its members, in any form. No information provided on this website should be construed as legal advice and NovoJuris Legal shall not be liable for consequences of any action taken by relying on the information provided on this website.