What is 'Positive Pay System' | Know how to prevent fraud on your bank cheque

 

Every year there are hundreds of cases related to fraudulent transactions in banks. Keeping this problem of the customers, Reserve Bank of India (RBI) has announced the positive pay system in the MPC meeting this time. In which fraud will be obtained from fake cheques through 'positive pay'. This system will be applicable to cheque with an amount of Rs 50,000 or more.

 

During the MPC meeting, RBI's governor Shaktikanta Das said that keeping in mind the security of cheque payments, we will issue guidelines related to positive pay system. This will prevent frauds in cheques of Rs 50,000 and above. He also said that in terms of volume, about 20% of transactions through cheques in the country will come under the scope of this system, while in terms of value, 80% of transactions will come under this system.

 

The positive pay was launched by ICICI Bank in 2016 for its customers. Under the 'positive pay' system, the person issuing the cheque to a third party will also send the details of their cheque to their bank. However, currently, the cheque truncation system (CTS) is used for cheque clearing. The CTC sends its digital photo document to the home branch of the payer's bank on behalf of the clearinghouse. In order to maintain clarity in money transactions.

 

These are the advantages and protections of positive pay. In this, the account number, cheque number, payer's name, payment amount and photo on both sides of the cheque will also have to be uploaded on the mobile app of the concerned bank. After uploading the information, the cheque has to be given to the third party. Experts say that bank employees cross cheque the uploaded information before transacting money. This will rid bank customers of fake cheques. It also reduces the cost and time it takes for a cheque to go from one place to another.

 

What does 'positive pay' do? Positive pay is a type of automatic cash management service that cheques for cheque related fraud. The bank through this cheque the institution or person issuing the cheque and the information of the cheque that will be received. During this time any cheque found to be disturbed is returned to the re-issuing institution or person. Currently, only ICICI Bank in India provides this type of service.