Positive Pay System: Cheque Payments to Become More Secure
Wondering about the Positive Pay System for cheque payments? Here’s a quick read to find out answers to all your questions.
When it comes to cheque payments, fraud and abuse have been increasing with every passing day. Thankfully, the Reserve Bank of India (RBI) is devising measures to make cheque payments more secure. One of the recent measures announced by RBI in August 2020 is the Positive Pay System which will be effective from the start of the new year.
What is Positive Pay System?
It is an automated tool that matches key details such as cheque number, cheque date, payee date and so on against a list of cheques previously authorised and issued by the issuer (presenting bank). If there is a discrepancy in details, the tool flags the transaction and informs the drawee as well as presenting banks.
What are the Details Checked by the Positive Pay System on Cheque Payments?
Here are the key details checked by the tool:
- Cheque Date
- Cheque Number
- Beneficiary’s/Payee’s Name
- Account Number
Is the Positive Pay System Compulsory for all Cheque Payments?
No, currently it is optional and only applicable to cheque payments exceeding Rs. 50,000.
When Will Positive Pay System Be Implemented?
It will come into effect from 1st January 2021.
Do you think RBI’s Positive Pay System will reduce cheque frauds?