Positive Pay System: Cheque Fraud Control in India YouTube Lecture Handouts

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Positive Pay System

Positive Pay System: Cheque Fraud Control in India | Banking & Economics
  • Effective from January 1st 2021, the RBI has introduced an electronic authentication system called Positive Pay that will allow you share the cheque details with your bank before the bank processes it.
  • his additional security layer is meant to address the rising instances of cheque fraud that have made headlines throughout the past year. As reported by the RBI, the total volume of fraud transactions in India was pegged at โ‚น 64,681 crores between April and September 2020 with forged or counterfeit cheques accounting a significant share.
Positive Pay System

Under this system, a person issuing the high-value cheque submits certain essential details of that cheque like date, name of the beneficiary/payee amount etc. to the drawee bank. The details can be submitted through electronic means such says SMS, mobile app, internet banking, ATM etc. The details are cross-checked while issuing the cheque and any discrepancy is flagged.

Positive Pay System
  • Some banks have been telling customers that if the details of large-value cheques are not pre-registered, the cheque will be returned, unpain. On issuance of a high-value cheque, customers should ensure that details are provided within the timeframe prescribed by the banks for hassle-free clearance. RBI has said only cheques that are registered in the Positive Pay System will be accepted under the dispute resolution mechanism. Customers would get an SMS on whether the cheque is accepted or rejected for any reason.
  • These details can be submitted through the respective bankีšs website, internet banking or mobile banking. In case a customer does not use electronic banking services, they can submit the details by visiting bank branches.

โœ Manishika