Spread the love

Here is an important information every bank account holder needs to know about cheque payments rule – Positive Pay System. The pay system will come into effective from 1st January 2021.

The intension of RBI for introducing the Positive pay system is fraud prevention in CTS. In the emerging technology world, customer has to adopt trending technology for safeguarding their hard earned money. Though many safety mechanisms are available in the existing CTS system, the PPS facility adds additional security.

Nowadays many fraudulent activities are happening in CTS. It is every bank account holder’s duty for availing this PPS facility for avoiding fraudulent activities.

What is Positive Pay System?

What is Cheque payment with ‘Secure Positive Pay System’?

In order to have control over the banking fraud, The Reserve Bank of India introduced the “positive pay system” for Cheque Truncation System a few months ago. This will verify the key details a cheque for payments beyond Rs 50,000.

RBI further added that, availing of this “Positive pay system” facility would be at the discretion of the account holder. RBI advised that Banks may consider making it mandatory in case of cheques for amounts of ₹5,00,000 and above. The key advantage of this system is fraud prevention

How does PPS work?

After an account holder issues a cheque to anyone, he/she will have to share the below cheque details with the bank

  • Account number
  • Cheque number
  • Amount
  • Cheque date
  • Payee/Beneficiary
  • Instrument type etc.,

Before making payment against the cheque, banks will match the details available on the cheque with those that the issuer has provided.

The issuer of the cheque submits electronically, through channels like SMS, mobile app, internet banking, ATM, etc., certain minimum details of that cheque to the drawee bank, details of which are cross-checked with the presented cheque by CTS.

What is Positive Pay?

Role of NPCI in ‘Secure Positive Pay System’

National Payments Corporation of India (NPCI) is developing the Positive Pay facility and will make it available to banks. According to the RBI’s notification, the issuer of the cheque will submit details through electronic channels like SMS, mobile app, internet banking, ATM, and so on.

As stated above, the customer will need to enter details of the cheque in any electronic channel mode.

Once the customer shares the details, the bank’s system will upload the data into the centralized data system of Positive Pay. On receiving the cheque in CTS, the bank will verify the details from the central database. In case of any mismatch, the bank will reject the cheque.

RBI advised the Banks to create adequate awareness among their customers on the features of Positive Pay System. Banks may use electronic channels like SMS alerts, display in branches, ATMs, web-site and internet banking.

Reserve Bank India


Only cheques that are compliant with the PPS will be accepted under RBI dispute resolution mechanism!
2 thoughts on “What is Positive Pay System for Cheque Truncation System?”

Leave a Reply

Your email address will not be published. Required fields are marked *