POSITIVE PAY SYSTEM (PPS) FOR CHEQUE TRUNCATION SYSTEM
To provide customers safety in cheque payments and reduce instances of fraud occurring on account of tampering of cheque leaves, RBI introduces a mechanism of Positive Pay for all cheques of value ₹50,000 and above. RBI Governor Shakti Kanta Das has announced of the same on 6 August 2020.
The Reserve Bank of India (RBI) vide their notification No. DPSS.CO.RPPD.No.309/04.07.005/2020-21 Dated September 25, 2020 has decided to implement ‘Positive Pay’ system to enhance the safety of cheque-based transactions.
This directive is issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007). This new rule came into effect from 1 January 2021.
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, ATM, etc., certain minimum details of that cheque (like date, name of the beneficiary / payee, amount, etc.) to the drawee bank, details of which are cross checked with the presented cheque by CTS. Any discrepancy is flagged by CTS to the drawee bank and presenting bank, who would take redressal measures.
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. 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 ₹5,00,000 and above.
Only those cheques which are compliant with above instructions will be accepted under dispute resolution mechanism at the CTS grids. Member banks may implement similar arrangements for cheques cleared / collected outside CTS as well.
Please note the following for Positive Pay System
This service is applicable for cheque received under CTS clearing of ₹50,000/- and above. While availing this facility is at the discretion of the account holder, it is mandatory for all cheques of amount ₹5.00 lakh & above.
Mode of Confirmation by customer to the bank through:
- mobile app,
- internet banking,
- ATM, etc.
Issuer of cheque (drawer) on writing the cheque must submit the below specific details of the cheque in the below sample email format with the attached excel sheet, as a confirmation of the cheque issued.
- Customer’s Account Number
- Cheque Number
- Cheque Date –
- Cheque Amount –
- Payee/Beneficiary Name –
Banks are advised 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.
Only those cheques which are compliant with above instructions will be accepted under dispute resolution mechanism at the CTS grids.