What is a positive pay system?What changes does this system make?

 

     Today I would like to inform you about new information from the Reserve bank of India. The Reserve Bank of India  has introduced a new rule for cheque payments  from January 1. This system  is called the positive  pay system.  This is for cheques under which re confirmation  of key details may be needed for payments  beyond Rs 50,000. Banks may consider making it mandatory  in case of cheques for amounts of Rs 5 lakh. 

     Banks should create awareness among their customers on features  of a positive pay system through SMS. Under this system the issuer of cheque will be required to submit electronically, sms,mobile apps,ATM.

    But could not be executed accurately due to lockdown. From June 1 some banks will implement a positive pay system. Suppose currently you have money in your account.When transferring more than Rs 50,000 by check, you have to sign the check.

     When the recipient of the check goes to the bank with the check,they will give money  after checking the signature.  This is currently being done. But RBI brought the new law, it reduces instances of fraud occurring  on account of tampering  of cheque leaves.

       Positive  pay system  is to provide customer safety  in cheque payments.It increases visibility  of check activity and gives greater control  over business  finances. It increases safety of cheque based transactions.  According  to this system,an issuer of a check will have to electronically  submit  minimum  details of cheques. 

         We should send the date,cheque number, to whom it is given, and the amount to the bank.Bank of baroda has been implementing this system since June 1. This system is available for transactions above Rs 50000.

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