On September 25, 2020, the Reserve Bank of India (RBI) has issued a directive under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007) stating an introduction of Positive Pay System for Cheque Truncation System (CTS) for banks in order to check fraud. It will be implemented from January 01, 2021.
- To be developed by National Payments Corporation of India (NPCI), this system will require re-confirmation of key details for payments beyond Rs 50,000.
- It should be noted that the usage of Positive Pay System is at the choice of account holder; however, banks may make it mandatory in case of cheques for amounts of Rs 5 lakh and above.
How will this system work?
Under the positive pay system, the issuer of the cheque will be required to submit certain minimum details of the cheque like date, name of the beneficiary, payee, and amount to the drawee bank electronically. These details will be cross-checked before the cheque is presented for payment. In case any discrepancy is flagged by cheque truncation system (CTS) to the drawee bank and presenting bank, redressal measures would be undertaken.
— Cheques under a positive pay system will only be accepted under dispute resolution mechanism at the CTS grids.
–Banks are advised to raise awareness among their customers on features of Positive Pay System through SMS alerts, display in branches, automated teller machines (ATMs) as well as through their web-site and internet banking.
Recent Related News:
i.On August 18, 2020, Reserve Bank of India (RBI) released the “Framework for authorisation of pan-India Umbrella Entity for Retail Payments” on the lines of the feedback received on the “draft framework for authorisation of a pan- India New Umbrella Entity for Retail Payment Systems” .
ii.On the lines of the review of progress made under the first National Strategy for Financial Education (NSFE: 2013- 2018) the revised NSFE (2020-2025) has been prepared and the document for the same was released by Mahesh Kumar Jain, Deputy Governor, Reserve Bank of India (RBI) on August 20, 2020.
About Reserve Bank of India (RBI):
Headquarters– Mumbai, Maharashtra
Formation– 1 April 1935
Governor– Shaktikanta Das
Deputy Governors– 4 (Bibhu Prasad Kanungo, Mahesh Kumar Jain, Michael Debabrata Patra, one is yet to be appointed).