Positive Pay System... explained

If you are an occasional user of cheque leaves issued against your account better familiarise with Positive Pay System of Rbi.

What is the positive pay system for high-value cheques?

The Reserve Bank of India (RBI) had issued guidelines for banks to implement it from January 1, 2021, to safe- guard against cheque frauds. Here is all you need to know:

What is the positive pay system? 

The positive pay System, developed by the National Payments Corporation of India, is a process of recon- firming the key details of large-value cheques. Under this, the person issuing a high-value cheque submits certain essential details of it,

like date, name of the benef- iciary and the payee amount, to the drawee bank. The de-

tails can be be submitted through electronic means such as SMS, a mobile app, internet banking or an ATM. The details are cross checked while issuing the cheque and any discrepancy is flagged.

What is the limit on the amount under the system?

The RBI has urged banks to enable the facility for ac- count holders issuing cheques for ₹50,000 and above. It has also said that while availing of the facility is at the discretion of the account holder, banks may consider making it mandatory in case of cheque values of ₹5,00,000 +.

Why is the system important for customers?

Some banks have been telling customers that if the details of large-value cheques

are not pre-registered, they will be returned unpaid. For hassle-free clearance, on issuance of a high-value cheque, customers should ensure that the details areprovided within the time-frame prescribed by the banks.

The RBI has said only cheques registered under the positive pay system will be accepted under the dis- pute resolution mechanism. Customers will get an SMS on whether the cheque is accepted or rejected for any reason.

What are the details that must be submitted? 

Account number, cheque number, cheque date, amount, transaction code, beneficiary name and the MICR code are the details that must be given.

How can the details be submitted?

The details can be submit- ted through the respective bank's website, internet banking or mobile banking. In case a customer does not use electronic banking ser-

vices, they can submit the details by visiting bank branches.

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