The Reserve Bank of India has announced that it will launch “Positive Pay System” for Cheque Truncation System from 01st January, 2021. The “Positive Pay System” will be developed by the National Payments Corporation of India (NPCI) and make it available to participant banks. Banks will be required to enable the 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.
The RBI had announced the Positive Pay mechanism in order to prevent frauds with high value cheques. Under this mechanism, cheques will be processed for payment by the drawee bank based on information passed on by its customer at the time of issuance of cheque. Banks are advised to create adequate awareness among their customers on features of Positive Pay System through SMS alerts, display in branches, ATMs as well as through their web-site and internet banking.
Important takeaways for all competitive exams:
- RBI 25th Governor: Shaktikant Das; Headquarters: Mumbai; Founded: 1 April 1935, Kolkata.