The new rule for cheque payments, which was decided by the Reserve Bank of India (RBI) in August, will come into effective from January 1, 2021. The ‘positive pay system’ for cheque payments was approved by the RBI few months ago and under the new rule, re-confirmation of key details will be required for any payments above Rs 50,000.
According to RBI, the ‘Positive Pay’ has been designed keeping in mind the consumer safety and it will help in reducing the cases of fraud using cheque.
Explaining the ‘Positive Pay’ system, RBI explained, “The CTS-2010 standard specifying minimum-security features on cheque leaves acts as a deterrent against cheque frauds, while standardisation of field placements on cheque forms enables straight-through-processing by use of optical/image character recognition technology.”
“To further augment customer safety in cheque payments and reduce instances of fraud occurring on account of tampering of cheque leaves, it has been decided to introduce a mechanism of Positive Pay for all cheques of value Rs 50,000 and above,” it added.
Key things to know about the ‘Positive Pay’ rule:
– Under this rule, after a cheque is issued by an account holder to anyone, they will share the cheque details with the bank. An account holder shares the details of the issued cheque like Cheque Number, Cheque date, Payee name, Account number, Amount, etc with the bank along with an image of the front and reverse side of the cheque, before giving the cheque to the beneficiary.
– Before making payment against the cheque, the details awill be matched by the banks with the details provided to the bank through Positive Pay and if the details match then only the cheque will be honoured.