The new cheque payment rule, ‘positive pay system’, will come into effect from 1 January 2021 to keep consumer safety in focus and to lower the cases of fraud and abuse with respect to cheque payment. RBI governor Shaktikanta Das had earlier announced that the new cheque payment rule will be introduced soon, under which re-confirmation of key details will be needed for payments beyond ₹50,000.
The Positive Pay is an automated fraud detection tool that matches specific information related to the cheque presented for clearing, such as 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. Under this process, the issuer of the cheque will submit certain minimum details of that cheque like date, name of the beneficiary / payee, amount, etc. to the drawee bank electronically, through channels like SMS, mobile app, internet banking, ATM, etc. National Payments Corporation of India (NPCI) shall develop the facility of Positive Pay in the Cheque Truncation System (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 details will be uploaded by the bank’s system into the centralized data system of Positive Pay. When the cheque is received by the bank, it will verify the details from the central database and make the payment if the details which the account holder has provided match those on the cheque. In case of a mismatch, the bank will reject the cheque. Although availing this facility is at the discretion of the account holder, banks may consider making it mandatory in case of cheques for amounts of ₹5,00,000 and above. RBI has advised banks to create adequate awareness among their customers on features of Positive Pay System through SMS alerts, display in branches, ATMs as well as through their web-site and internet banking.