Cheque Payment System: The Reserve Bank of India (RBI) has decided to implement a positive pay system to pay by check a few days ago. Under this new rule, the required details on payments above Rs 50,000 will need to be reconfigured. This new rule of payment by check will come into effect from 1 January 2021. The Governor of RBI announced this in the meeting of the Monetary Policy Committee i.e. MPC in the month of August this year. Keeping in mind the safety of customers, RBI has decided to implement a positive pay system.
Positive pay system is an automated fraud detection tool. The reason behind the RBI’s introduction of this rule is to stop the misuse of checks. It is believed that this system will reduce fraud caused by fake checks.
What is the positive pay system
The positive pay system is a kind of tool to catch fraud. Under this system, when someone issues a check, he will have to give full details to his bank. In this, the issuer of the check will have to give the date of the check electronically through SMS, Internet banking, ATM or mobile banking, name of the beneficiary, account number, total amount and other necessary information to the bank. With this system, where payment will be secured by check, clearance will also take less time.
The National Payment Corporation of India (NPCI) will develop a positive pay facility in the Check Truncation System (CTS) and make it available to banks. This system will be applied to the payment through the check of 50 thousand or more. Check truncation is a process of clearing system checks. In this, the physical check issued does not have to roam from one place to another. The check truncation system makes the process of check collection faster.
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How will the system work
The issuer of the check can provide the necessary details through electronic means like SMS, mobile app, internet banking or ATM. After this, these information will be cross-checked before check payment. If there is any defect in it, then the bank will reject the check. Here if there is a case of 2 banks i.e. the bank whose check has been deducted and the bank in which the check has been inserted, then both will be informed about it.
Source: www.financialexpress.com