Positive Pay system

The concept of Positive Pay involves a process of reconfirming key details of large value cheques.
Under this process, the issuer of the cheque submits electronically through channels like SMS, mobile app, internet banking and ATM certain minimum details of that cheque (like date, name of the beneficiary or payee and amount) to the drawee bank, details of which are cross checked with the presented cheque by Cheque Truncation System (CTS).
Any discrepancy is flagged by CTS to the drawee bank and presenting bank, who would take redressal measures.
Banks will enable the new system for all account holders issuing cheques for amounts of Rs 50,000 and above. 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 Rs 5,00,000 and above.
National Payments Corporation of India (NPCI) will develop the facility of Positive Pay in CTS and make it available to participant banks.
The Reserve Bank says the Positive Pay system is to further augment customer safety in cheque payments and reduce instances of fraud occurring on account of tampering of cheque leaves.
Banks had recently witnessed a rise in frauds involving high-value cheques.
The RBI announced the introduction of Positive Pay system for CTS on August 6.

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