The Reserve Bank of India (RBI) announced the introduction of a 'Positive Pay System for Cheque Truncation System (CTS)' from 1 January 2021, under which re-confirmation of key details may be needed for payments beyond Rs 50,000.
In a notification on 25 September to all scheduled commercial banks in India, the central bank explained that the concept of Positive Pay involves a process of reconfirming key details of large value cheques, wherein, the issuer of the cheque submits electronically, through channels like SMS, mobile app, internet banking, ATM, etc., certain minimum details of that cheque (like date, name of the beneficiary/payee, amount, etc.) to the drawee bank, details of which are cross-checked with the presented cheque by CTS.
Any discrepancy is flagged by CTS to the drawee bank and presenting bank, who would take measures to address that same.
RBI further said banks will enable the CTS for all account holders issuing cheques for amounts of Rs 50,000 and above. Availing this facility is at the discretion of the account holder, but banks may consider making it mandatory in case of cheques for amounts of Rs 5 lakh and above.
The National Payments Corporation of India (NPCI) shall develop the facility of Positive Pay in CTS and make it available to participant banks.
Only those cheques which are compliant with the above instructions will be accepted under dispute resolution mechanism at the CTS grids. Member banks may implement similar arrangements for cheques cleared/collected outside CTS as well.