The information that needs to be verified includes, but is not limited to, check number, check date, beneficiary name, account number, amount, and other important details. This is then compared to the issuer`s previous checks. A number of the country`s major banking institutions have adopted this rule and have made it a mandatory part of their cheque verification process, particularly for high-quality checks. – However, banks are free to introduce similar rules for cheques cleared and cashed outside the CTS. BoB issued a notice stating: „Under RBI`s policy, the positive payment system (CPPS) will be mandatory on 01.08.2022 for cheques made out on the scale of Rs 5 lakh and above. These cheques will be rejected on 01.08.2022 if no positive salary confirmation is presented. If there is a discrepancy in the details, CTS will report it to the shooter and the processing bank, which must take corrective action. According to the RBI`s guidelines, only verifications that comply with these instructions will be accepted under the dispute resolution mechanism in the CTS grids. Under the PPS, the RBI had stated that cheques for amounts of Rs 50,000 and above had to match the PPS. However, it has not been made mandatory. This regulation entered into force on 1 January 2021.
Before paying against the check, banks must match the data available on the check with that provided by the issuer, which means that the payee submits the check for cashing, the check details are compared to the details provided to the bank via Positive Pay, and if the details match, the check is cashed. – Banks, in turn, allow all account holders who write cheques for amounts of Rs 50,000 and above. „In order to further increase customer security when paying by cheque and reduce fraud due to cheque sheet manipulation, it has been decided to introduce a positive payment mechanism for all cheques worth Rs 50,000 and above,“ the RBI noted. Here are 5 things you need to know about the new rule for check payments: According to the positive payment system, once an account holder issues a check to a payee, they must share the check data with their bank. The data to be submitted to the bank includes check number, check date, beneficiary name, account number, amount, etc. Account holders must also share a photo of the front and back of the cheque before delivering it to the recipient. Before making the payment to the beneficiary, the bank compares all the data available on the cheque with that provided by the account holder. If the details match, the check will be cashed. Why is the positive compensation system important? Under the positive payment mechanism, after an account holder issues a check to someone, shares the check details with the bank. An account holder provides the bank with the details of the cheque issued, such as cheque number, cheque date, beneficiary name, account number, amount, etc., as well as a photo of the front and back of the cheque, before handing it over to the beneficiary. – This information will be verified before the check is presented for payment. Positive Pay is essentially an automated fraud detection tool.
It associates certain information related to the cheque presented for settlement, such as cheque number, check date, beneficiary name, account number, amount, and other details with a list of previously approved cheques issued by the issuer. The concept of positive payment involves a process of reconfirming important details of high-value cheques. Any discrepancies in details will be reported by CTS to the referring bank and the referring bank, which will take corrective action. The National Payments Corporation of India (NPCI) will develop the possibility of positive remuneration in CTS and make it available to participating banks. – Under the positive salary system, the issuer of the cheque must electronically transmit certain minimum details of that cheque, such as date, recipient`s name, payee and amount, to the recipient`s bank via SMS, mobile app, online banking or ATM. Use of this option is at the discretion of the Account Holder. However, banks may consider making this mandatory in the case of cheques for amounts of Rs 5 lakh and above. The positive remuneration system for cheques came into effect on 1 January 2021.
In order to combat bank fraud, the Reserve Bank of India had decided in 2020 to introduce the „positive salary system“ for cheques, where payments over Rs 50,000 may require reconfirmation of key details.