The Reserve Bank of India (RBI) decided to introduce the ‘positive pay system’ for cheque a couple of months ago. Under the new rule re-confirmation of key details may be needed for payments beyond ₹50,000.
This new cheque payment rule will come into effect from 1 January 2021. The announcement by RBI Governor Shaktikanta Das in August MPC came in order to keep consumer safety in focus and to lower the cases of fraud and abuse with respect to cheque payment.
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.
– The ‘Positive Pay’ system involves reconfirmation of key details of large value cheques.
-Banks shall enable it for all account holders issuing cheques for amounts of Rs 50,000 and above. While availing of this facility is at the discretion of the account holder, banks may consider making it mandatory in case of cheques for amounts of Rs 5,00,000 and above.