The Reserve Bank of India rolled out a 'positive pay system' a couple of months ago. Under this new rule, those making payments of over Rs 50,000 will need to reconfirm some key details.
Positive Pay is essentially a tool designed to detect fraudulent activity. It does this by matching specific information related to the cheque presented for clearing, 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 all you need to know about the new cheque payment rule will come into effect from 1 January 2021.
-- The process involves reconfirmation of key details of large value cheques.
-- The cheque issuer will furnishes certain minimum details of the cheque like name of the beneficiary/payee, amount, electronically via channels like SMS, mobile app, internet banking, ATM, to the drawee bank. Details of this are then 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.
--National Payments Corporation of India (NPCI) shall develop the facility of Positive Pay 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.
--While the option to avail 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.
--To be accepted under dispute resolution mechanism at the CTS grids, these cheques must be compliant with the instructions discussed above.
Member banks are also free to implement similar arrangements for cheques cleared/collected outside CTS as well.