Many banks are making Positive Pay mandatory from August 1, 2022 for cheques issued for Rs 5 lakh above. In case you do not provide Positive Pay confirmation, such cheques will be rejected by your banker. But, what is Positive Pay? Positive Pay is a part of the cheque clearing system under which the cheques will be processed for payment by the drawee bank based on information passed on by the account holder at the time of issuance of cheque.
Positive Pay System involves re-confirming of key details of the cheque by drawer to the Bank, which would be cross-checked with the presented cheque at the time of payment processing.
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All one needs to do is share the details of the issued cheque like Cheque Number, Cheque date, Payee name, Account number, Amount etc along with an image of the front and reverse side of the cheque, before handing it over to the beneficiary.
When the beneficiary submits the cheque for encashment, the cheque details are compared with the details provided to the Bank through Positive Pay. If the details match, the cheque is honoured. In case of mismatch in cheque details, the cheque is referred to you.
One may also log on to the net banking or the banking app to compelte the Positive Pay formalities by furningsing the Cheque Number, Cheque date, Payee name, Account number, Amount etc. Effectively, Positive Pay mechanism helps in fast clearing of cheques. Positive Pay also aims to prevent frauds perpetrated through cheque tampering/alteration.
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If you are an SBI account holder, here’s how to register for Positive Pay. One needs to do a one-time registration of their cheque operated account for Positive Pay System through any of the branches by submitting an application in the prescribed format. Registration can also be done through alternate channels like Retail Internet Banking (RINB), Corporate Internet Banking (CINB), Mobile Banking (YonoLite) and YONO (Mobile App).
Positive Pay was introduced by RBI in September 2020 for all account holders issuing cheques for amounts of Rs 50,000 and above. RBI had stated that 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 lakh and above.
