In order to check 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 may 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 in case of cheques for amounts of Rs 5 lakh and above.
Under the positive pay system, the issuer of the cheque will 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 will be cross-checked before the cheque is presented for payment. 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 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 Rs 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 Rs 5,00,000 and above," the RBI said.
The positive pay system will be implemented from January 1, the central bank said. It added that the "banks are advised to create adequate awareness among their customers on features of positive pay system through SMS alerts, display in branches, ATMs as well as through their website and internet banking".
The RBI further said only those cheques that are compliant with positive pay system instructions will be accepted under the dispute resolution mechanism at the CTS grids. Banks, however, will be free to implement similar arrangements for cheques cleared and collected outside CTS.