Positive Pay System applicable for check payment from today
know what it is and how it works
Positive Pay System: Positive Pay System, implemented from today, is applicable on checks of value above Rs 50,000. RBI had implemented the Positive Pay System from January 1, 2021. Banks are gradually implementing it in several phases.
- Positive Pay System applicable for check payment from today
- New system to prevent fraud related to check payment
- Applicable on checks of value above Rs 50,000
Positive Pay System: On 1st September 2021 i.e. from today, the positive pay system has been implemented for the use of cheques. The Reserve Bank of India has brought this system to prevent fraud related to check payment. But what is this system and how does it work?
What is Positive Pay System
- (A) What was the system of check payment earlier
The Positive Pay System implemented from today is applicable on checks of value above Rs 50,000. Before understanding this Positive Pay System, it has to be understood that how the whole system of payment by check works. Suppose my account is in SBI and yours is in Axis Bank. I gave you a check of Rs 1 lakh to pay for some work after completion.
You gave this check to your bank ie Axis Bank. Axis Bank will show this check to my bank i.e. SBI through CTS (Check Truncation System). SBI will give the amount in that check to your Axis Bank, and you will get the payment.
- (B) What to do from today?
Now the scope of fraud here is that suppose I have given you a check of 1 lakh, you have made a check of 10 lakhs in some way, then it will be difficult for me. Now in the new Positive Pay System system, when I will give any check to anyone, I will have to give complete details of this check to my bank (SBI in this case) along with giving you the check. Such as the date of the check, name of the beneficiary, account number, total amount and other necessary information will have to be given to the bank.
When you give my given check to your bank (Axis Bank), it will send it to my bank i.e. SBI through CTS. SBI will match the information of this check with the details sent by me. If the details match, it will clear the check, otherwise the check will be rejected.
- How to tell the bank about the check
Now the question arises that how will I give information about any check to my banks? So for this you can use mobile banking. If you do not use mobile banking, then you can also give your bank information through the bank’s website or SMS.
- Which banks apply
Let us tell you that RBI had implemented Positive Pay System from January 1, 2021. Banks are gradually implementing it in several phases. From September 1, 2021, that is, from today, Axis Bank has made this system mandatory. But major banks like State Bank of India, Bank of Baroda, HDFC Bank, ICICI Bank have already implemented it here.