Positive Pay System for cheques: Everything it’s worthwhile to know concerning the new rule for cheque funds

The ‘Positive Pay System’ for cheques which was launched by the Reserve Bank of India in September final yr comes into impact from immediately. The new system goes to reinforce the security of cheque-based transactions within the nation based on the central financial institution.
Under the optimistic pay system, an issuer a cheque must electronically submit sure minimal particulars of the actual cheque (similar to date, title of the beneficiary, payee and quantity) to the drawee financial institution. This may be completed by varied channels – SMS, cellular app, web banking and ATM.
The particulars offered are then going to be cross-checked with the introduced cheque by Cheque Truncation System (CTS). In case, there’s a discrepancy, will probably be flagged by the CTS to the drawee financial institution and presenting financial institution, who will then take redressal measures.
Will or not it’s completed for all cheques?
No. This course of can be completed on high-value cheques for quantities of Rs 50,000 and above. The Positive Pay System is a measure designed to detect any fraudulent exercise associated to cheque transactions.
Will or not it’s accessible for all financial institution accounts?
Banks shall allow it for all account holders issuing cheques for quantities of Rs 50,000 and above. While availing of this facility is on the discretion of the account holder, banks could think about making it obligatory in case of cheques for quantities of Rs 5,00,000 and above.
What occurs in case of a dispute?
According to a September round of the RBI, solely these cheques that are compliant with above directions will likely be accepted below dispute decision mechanism on the CTS grids. Member banks could implement comparable preparations for cheques cleared or collected outdoors CTS as properly.