Money & Banking

Positive Pay system for high value cheques from January 1, 2021: RBI

Our Bureau Mumbai | Updated on September 27, 2020 Published on September 26, 2020

The Reserve Bank of India on Friday said the proposed Positive Pay System for Cheque Truncation System will be introduced from January 1 next year and will be developed by the National Payments Corporation of India.

“NPCI shall 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 ₹50,000 and above,” the RBI said.

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 ₹5 lakh and above, it further said.

The RBI had last month announced the Positive Pay mechanism to prevent frauds with high value cheques.

Positive Pay mechanism

“Under this mechanism, cheques will be processed for payment by the drawee bank based on information passed on by its customer at the time of issuance of cheque,” the RBI said in the Statement on Developmental and Regulatory Policies, adding that it would cover approximately 20 per cent and 80 per cent of total cheques issued in the country by volume and value, respectively.

In Friday’s notification, it said that only those cheques which are compliant with its instructions will be accepted under dispute resolution mechanism at the CTS grids.

“Member banks may implement similar arrangements for cheques cleared and collected outside CTS as well,” it said, adding that banks should create awareness amongst customers about the Positive Pay mechanism.

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Published on September 26, 2020
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