The State Bank of India (SBI) has rolled out the 'positive pay system' for high-value payments made via cheques. This system was rolled out by RBI (Reserve Bank of India) a few months ago and was to become effective from 1 January 2021.
The system requires re-confirmation of key details when making payments over Rs 50,000 to keep bank frauds in check.
It is a tool designed to detect fraudulent activity. It matches specific information related to the cheque presented for clearing, like the cheque number, cheque date, payee name, account number, amount, and other details against a list of cheques previously authorized and issued by the issuer.
"As per RBI guidelines, we are introducing Positive Pay System (PPS) w.e.f. 01/01/2021 to ensure added security where the cheque issuer now needs to provide details such as account number, cheque number, cheque amount, cheque date payee name with respect to the cheque payments," SBI said on its website.
Keeping all your transactions safe including those done via Cheques.— State Bank of India (@TheOfficialSBI) December 29, 2020
SBI is introducing Positive Pay System from 1st January 2021 to make Cheque payment secure. To know more, contact your nearest SBI branch.#SBI #StateBankOfIndia #PositivePaySystem #PPS #ChequePayment pic.twitter.com/Ah6vL7MjHu
The issuer of the cheque submits these details electronically through channels like SMS, mobile app, internet banking, ATM, etc., to the drawee bank.
RBI had directed the National Payments Corporation of India (NPCI) to make a facility available to Indian lenders.
SBI account holders can place a request for a cheque book delivery to any address of their choice online through the bank's internet banking.
To be accepted under the dispute resolution mechanism at the CTS grids, these cheques must be compliant with the instructions on positive pay system.