The Reserve Bank of India’s (RBI) has stated its intention to adopt the Positive Pay system for the payment of cheques valuing Rs 50,000 and above.
Salient Features
-From this action, high value bank cheque transactions are set to become safer.
-The Positive Pay mechanism will ensure that every high value cheque valued at Rs 50,000 and above is crossed checked with details provided by the issuing party or the individual.
-Only a match will lead to the drawee’s bank clearing the cheque and in the event of a ‘no match’ scenario, the issuing authority/individual will be contacted for verification, cancellation or withdrawal of the cheque.
-An account holder will electronically upload the details of the high value cheque through the bank’s net banking system.
-Customers will need to put in a cheque number, issuance date, payee name, account number, amount payable along with an image of the front and reverse side of the instrument.
-Positive Pay is a fraud detection tool adopted by banks to protect customer against forged , altered or counterfeit cheques.
-Private sector lender ICICI Bank adopted this feature in 2016 for all cheques respective of the amount.
-With ICICI Bank, the cheque images can be sent to the bank branch through their iMobile application where the issuer needs to go to cheque book services. The cheque images, as well as the information, will be validated only on the next working day of the bank branch. Additionally, with this system, the process of clearing cheques is accelerated
Effects
-The system is being introduced to end cheque frauds including altering, counterfeiting and forging of the financial instruments.
-It is likely to cover 20 percent of total cheques by volume and 80 percent by value.
(Source: Hindustan Times and Times of India)
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