Positive Pay System: RBI introduced the facility in 2021 to combat the rising cases of cheque fraud.
Positive Pay System: Worried about cheque fraud? The Reserve Bank of India (RBI) has your back. Introduced in 2021, the Positive Pay System (PPS) is an electronic shield against forgery and unauthorised alterations of high-value cheques. This innovative measure aims to combat the rising cases of cheque fraud and provide an extra layer of protection for both individuals and businesses.
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What is a Positive Pay System?
The Positive Pay System (PPS) in India is a fraud detection mechanism introduced by the Reserve Bank of India, to safeguard high-value cheque transactions. Think of Positive Pay as an extra layer of security for your high-value cheques (Rs. 50,000 and above). Before handing over the cheque, you electronically share key details (cheque number, date, payee name, account number, amount) with your bank. This way, when the cheque is presented for encashment, the bank can verify the information and ensure its legitimacy.
How Does it Work?
Issue a Cheque: Whenever you write a cheque for Rs. 50,000 or more, consider using Positive Pay.
Share Cheque Details: Submit the cheque details (number, date, amount, payee information) to your bank through online banking, mobile app, SMS, or by visiting a branch.
Bank Verification: When the beneficiary deposits the cheque, your bank electronically verifies the details against the information you provided.
Enhanced Security: If everything matches, the cheque is cleared for payment. Any discrepancies raise a red flag, preventing fraudulent transactions.
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Benefits of Positive Pay:
Reduced Cheque Fraud: Minimises the risk of altered or fake cheques.
Enhanced Security: Adds an extra layer of protection for your money.
Faster Clearing: Reduces delays due to discrepancies in cheque details.
Peace of Mind: Provides confidence and security in your cheque transactions.
Important Points to Remember:
Voluntary (Rs. 50,000 – Rs. 5 lakhs): While mandatory for cheques exceeding Rs. 5 lakhs, Positive Pay is currently voluntary for cheques between Rs. 50,000 and Rs. 5 lakhs.
No Modifications: Once submitted, cheque details cannot be changed or deleted.
Stop Payment: You can still stop payment on a cheque before it’s presented.
Implementation Across Banks:
Most Indian banks offer Positive Pay for cheques above Rs 50,000. Contact your bank to understand their specific implementation details and submission methods.
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How To Register For Positive Pay System In Your Bank?
Customers wishing to enrol in the Positive Pay System must complete a one-time registration for their cheque-operated account. This can be done by applying the prescribed format (Annexure I) to your bank. In SBI, registration is also available through digital channels such as Retail Internet Banking (RINB), Corporate Internet Banking (CINB), Mobile Banking (YONO Lite), and the YONO mobile app.
During registration, customers are required to select an account-level limit based on their risk perception. However, the bank has a Positive Pay System mandatory for Savings Bank account cheques of Rs 5 lakhs and above, and for cheques of Rs 10 lakhs and above for other account types, such as Current Account, Cash Credit, and Overdraft.
The Bottom Line:
The Positive Pay System is a game-changer for cheque security. By proactively sharing cheque details, you can significantly reduce the risk of fraud and ensure safe and secure cheque transactions.
