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Current Affairs

Positive Pay System

Date: 05 August 2021 Tags: miscellaneous

Issue

The banks have been informing their customers that the Positive pay system has been made compulsory for high value cheques.

 

Background

Implementation of the Positive Pay System was compulsorily mandated by the Reserve Bank of India from January 2021.

 

Details

  • Positive Pay System is a process in which the key details of the high-value cheques will be reconfirmed by the payees. It was developed by NPCI.

  • Essential details of the high-value cheques such as name of the beneficiary, date etc to the drawee bank will have to be disclosed additionally by the person.

  • Various methods such as SMS, internet banking, mobile app etc can be used by customer to submit the details. The details will be then cross checked.

 

Conditions

  • The RBI circular says that the facility is enabled to all cheques that are equal or above the value of Rs 50,000.

  • The availing of the facility by customers is their discretion but banks can make it mandatory in case the cheque values is Rs 5 lakh and above.

 

Importance for customers

Customers will have to ensure that they provide the details within the given time frame for easy transaction.  They will receive notification whether their cheque is accepted or rejected.

 

Details required

Name of beneficiary, account number, date of cheque, cheque number, MICR code, amount, transaction code.