RBI to introduce Positive Pay System for Cheque Truncation System from January 01, 2021

RBI to introduce Positive Pay System for Cheque Truncation System from January 01, 2021

• The Reserve Bank of India has announced to launch the facility of Positive Pay System for Cheque Truncation System (CTS) i.e the cheques cleared through CTS (movement of the image of cheque in place of physical movement of cheque).

• Positive Pay in CTS will be developed by NPCI which manages the CTS in India.

• Under this facility, the issuer of the cheque will submit the important details (like date, name of the beneficiary / payee, amount, etc.) of large value cheques to the drawee bank. These details will be crossed checked against the actual cheque that is presented on the CTS. This will help in preventing cheque fraud.

• NPCI will make this facility available to the commercial banks. These banks in turn will make this facility available to its customers. The customer can submit the cheque details through channels like SMS, mobile app, internet banking, ATM, etc.

• Banks are required to make this facility available to the customers where the amount of cheque is Rs. 50,000 and above. However, availing of this facility is at the discretion of the account holder. Banks can however mak this facility compulsory for cheques with the amount of Rs 5 lakh and above.

• Positive Pay System will be implemented from January 01, 2021.

Points to remember:

1. Who will develop the Positive Pay System?- NPCI
2. From when will the positive pay system be implemented in India?- Jan 01, 2020
3. Positive Pay system is related to?- CTS
4. Name the system launched by RBI for the prevention of cheque frauds?- Positive Pay
5. Banks are required to make the Positive Pay facility available to the customers where the amount of cheque is ___________ and above. – Rs. 50,000

Source: RBI