Current AffairsEconomics

Positive Pay Mechanism

Banks have been informing customers about making mandatory, the positive pay system, a process of reconfirming the key details of high-value cheques.

About
  • Positive Pay Mechanism: It involves a process of reconfirming key details of large-value cheques.
  • Process: Under this, the issuer of the cheque submits electronically through channels like SMS, mobile app and Internet banking, certain minimum details of cheque to the drawee bank, details of which are cross-checked with the presented cheque by Cheque Truncation System(CTS).Any discrepancy is flagged by CTS to the drawee bank and presenting bank who then take redressal measures.
  • Cheque Limits: Banks will enable the new system for all account holders issuing cheques for amounts of Rs 50,000 and above.It is mandatory in case of cheques for amounts of Rs 5,00,000 and above.
  • Developed by: National Payments Corporation of India (NPCI) will develop the facility of Positive Pay in CTS and make it available to participant banks.
  • Some banks have been telling customers that if the details of large-value cheques are not pre-registered, the cheque will be returned.
  • 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.\
Tags: Current Affairs, Economics

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