Positive Pay System - New clearing process for high value cheques soon

To increase customer safety in cheque payments and reduce instances of fraud occurring on account of tampering of cheque leaves, the RBI has decided to introduce a mechanism of Positive Pay for all cheques of value ₹50,000 and above.

Under the new mechanism, cheques will be processed for payment by the drawee bank based on information passed on by its customer at the time of issuance of cheque.

Under the Positive Pay system, an account holder shares the details of issued cheque to bank like Cheque Number, Cheque date, Payee name, Account number, Amount etc along with an image of the front and reverse side of the cheque, before handing it over to the beneficiary.

When the beneficiary submits the cheque for encashment, the cheque details are compared with the details provided to the bank through Positive Pay. If the details match, the cheque is honoured.

Under this mechanism, cheques will be processed for payment by the drawee bank based on information passed on by its customer at the time of issuance of cheque. This measure will cover approximately 20% and 80% of total cheques issued in the country by volume and value, respectively.

Operational guidelines for the purpose will be issued, the RBI said.

Compiled by :

CA IP Mukesh Mittal

B.Com., FCA

Insolvency Professional

Independent Director

Certified Concurrent Auditor

9215536951, 9813340495

ca.mukeshmittal@gmail.com

https://camukeshmittal.blogspot.com

DISCLAIMER: The Author have taken utmost care while drafting the article but it may occur that certain error creeps in. This article is for academic purpose and should not be treated as a professional advice. The readers are advised to refer the Bare Acts, Related Material and Rules before making any judgment.