Cheque System (New) in Banks from 1st Jan 2021

Banks will enable a new system for all account holders issuing cheques for amounts of Rs 50,000 and above.

On January 1, 2021, the Reserve Bank of India (RBI) will introduce the ‘Positive Pay System’ for cheque transactions above Rs 50,000 in a bid to enhance safety and eliminate frauds

Positive Pay System Explanation

The concept of Positive Pay involves a process of reconfirming key details of large-value cheques. Under this process, the issuer of the cheque submits electronically, through channels like SMS, mobile app, Internet banking and ATM, certain minimum details of that cheque (like date, name of the beneficiary, or payee and amount) to the drawee bank, details of which are cross-checked with the presented cheque by Cheque Truncation System (CTS).

Type of cheques under Positive Pay

Banks will enable the new system for all account holders issuing cheques for amounts of Rs 50,000 and above. While availing of this facility is at the discretion of the account holder, banks may consider making it mandatory in case of cheques for amounts of Rs 5,00,000 and above.

Reason:

customer safety in cheque payments and reduce instances of fraud occurring on account of tampering of cheque leaves.