From UPSC perspective, the following things are important :
Prelims level : Positive Pay System
Mains level : Not Much
Banks have been informing customers about making mandatory, the positive pay system, a process of reconfirming the key details of high-value cheques.
What is the Positive Pay System?
- The Positive Pay System, developed by the National Payments Corporation of India, is a process of reconfirming the key details of large value cheques.
- Under this system, a person issuing the high-value cheque submits certain essential details of that cheque like date, name of the beneficiary/payee amount etc. to the drawee bank.
- The details can be submitted through electronic means such as SMS, mobile app, internet banking, ATM etc.
- The details are cross-checked while issuing the cheque and any discrepancy is flagged.
Try answering this PYQ:
Q.Which one of the following links all the ATMs in India? (CSP 2018)
(a) Indian Banks’ Association
(b) National Securities Depository Limited
(c) National Payments Corporation of India
(d) Reserve Bank of India
(Note: You need to sign-in to answer this PYQ)
Post your answers here.
What is the limit on the amount for the system?
- RBI has told banks to enable the facility for all account holders issuing cheques for amounts of ₹50,000 and above.
- It has also been said that while availing of the facility is at the discretion of the account holder, banks may consider making it mandatory in case of cheque values of ₹5 lakh and above.
Why is this system important for customers?
- Some banks have been telling customers that if the details of large-value cheques are not pre-registered, the cheque will be returned.
- On issuance of a high-value cheque, customers should ensure that details are provided within the timeframe prescribed by the banks for hassle-free clearance.
- RBI has said only cheques that are registered in the Positive Pay System will be accepted under the dispute resolution mechanism.
- Customers would get an SMS on whether the cheque is accepted or rejected for any reason.
What are the details of the cheque that must be submitted?
- Account number, cheque number, date of the cheque, amount, transaction code, beneficiary name, MICR CODE.
How can these details be submitted?
- These details can be submitted through the respective bank’s website, internet banking, or mobile banking.
- In case a customer does not use electronic banking services, they can submit the details by visiting bank branches.