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Reserve Bank of India (RBI) instructed all banks to implement Positive Pay System in order to safeguard customer money against Cheque frauds. It enables cheque issuing customer to reconfirm the high value cheque details given for CTS collection. Hence the possibility of conducting cheque frauds is very very less under this process.

Further, as per the RBI instruction, all Public Sector and Private Sector banks implemented this Positive Pay System for their customer and made mandatory for the cheque value of Rs. 5.00 Lakhs and above form January 01, 2022. So many of you might be having various questions on your mind about Positive Pay System. In order to clear your doubts we have framed following question and answer about PPS.

Frequently Asked Questions on Positive Pay

1. What is Positive Pay System?

Positive Pay System is a mechanism which enables customer to re-confirm the high value cheque details given for clearing. The person issuing a high value cheque has to confirm the key elements of the cheque such as Amount, Cheque Number, Cheque Date, Account Number, Payee / Beneficiary Name to the Drawee Bank. The Drawee bank will then submit these details to National Payment Corporation of India (NPCI) for validation while processing in CTS clearing.

2. What are the benefits of Positive Pay System?

Positive Pay will increase safety in cheque payment (presently in CTS) and will reduce instances of fraud occurring on account of tampering of cheques. It is a fraud detection tool adopted by all banks to protect customers against forged, altered or counterfeit cheques.

3. How to give Positive Pay Confirmation?

Positive Pay confirmation can be given through branch banking and electronic channels like Mobile banking and Internet banking. Almost all banks have implemented this facility in their Mobile banking application and Internet banking facility. So you can make use of these facility to give Positive Pay confirmation for your high value cheques.

4. How does Positive Pay System work?

Positive Pay System collects high value cheque details like Account number, Cheque number, Cheque Date, Amount, Payee Name and submit to National Payment Corporation of India (NPCI). The NPCI validates these details while presenting the particular cheque in CTS clearing. If any mismatch is noticed between the submitted details and physical cheque, then the cheque will be returned.

5. When should I give Positive Pay Confirmation?

Positive Pay confirmation has to be given for high value cheque at least one day prior to the date of cheque to Drawee bank. So that the Drawee bank can able to submit the cheque details to NPCI before the cheque present for clearing.

6. Is Positive Pay System mandatory?

It is mandatory for the cheque value of Rs. 5 Lakhs and above. But you can give PPS confirmation for cheque amount from Rs. 50000/- also at your discretion.

7. What are available channels for giving Positive Pay confirmation?

Almost all banks have implemented PPS in Mobile Banking application and Internet Banking. The person visiting the branch directly also can give PPS confirmation through PPS form.

8. What are the timing to use Positive Pay?

If you are using electronic channel like Mobile Banking and Internet Banking, then you can give confirmation at any time at your convenience. But If your visiting bank branch for PPS confirmation then you have to follow branch working timings. Anyhow, you have to submit the PPS details at least one day prior to the cheque date.

9. What are the details of a Cheque to be submitted in PPS?

The cheque details to be submitted in PPS are Account Number Cheque Number, Cheque Date, Amount, Payee Name.

10. Is there any exemption for Government Cheque?

No, Government cheque details also have to be submitted to PPS by the authorized signatory of the cheque.

11. Who empowered to manage Positive Pay?

National Payment Corporation of India (NPCI) will collect all the PPS confirmation details from the member banks and stored in CTS clearing database.

12. What is Cheque Truncation System (CTS)?

Cheque Truncation System (CTS) is an imaged based clearing system which accepts all cheque images electronically for faster clearing of cheques. It avoids physical movement of the cheque between the colleting bank and the paying bank.

13. What will happen, if cheque details are not submitted under Positive Pay?

If you are not submitting cheque details under Positive Pay for the cheque value of Rs. 5 Lakhs and above, the cheque will be rejected. If the cheque value is less than Rs. 5 Lakhs, it is not mandatory to give PPS confirmation so the cheque will be honored.

14. What is the limit of cheque amount under Positive Pay?

Cheque value of Rs. 50,000/- and above can be submitted under Positive Pay. However, It is mandatory to submit PPS confirmation for the cheque value of Rs. 5 Lakhs and above.

15. Why is it important to use Positive Pay?

Positive Pay is a mechanism to safeguard the cheques issued from alteration or forgery and avoid any fraud. If Positive Pay facility is not used, any claim raised against the particular cheque will not be accepted under dispute resolution mechanism at RBI.

16. Are there any charges for availing Positive Pay System?

No, almost all the banks are providing this service at free of cost.

17. If there is a mismatch in details submitted, will the cheque be processed?

No. If there is a difference in details submitted by you and the cheque received in clearing, then the Bank has the right to return the cheque to the presenting bank in CTS clearing.

18. Will I receive any confirmation after PPS details are submitted?

Yes, you will receive a SMS for your Positive Pay Confirmation since all the banks have to intimate the receipt of the cheque details.

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