What is Positive Pay Mechanism?

Source: The Indian Express

News: From 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 Mechanism: It involves a process of reconfirming key details of large-value cheques.
  • Process: Under this, the issuer of the cheque submits electronically through channels like SMS, mobile app and Internet banking, certain minimum details of cheque to the drawee bank, details of which are cross-checked with the presented cheque by Cheque Truncation System(CTS).Any discrepancy is flagged by CTS to the drawee bank and presenting bank who then take redressal measures.
  • Cheque Limits: Banks will enable the new system for all account holders issuing cheques for amounts of Rs 50,000 and above.It is mandatory in case of cheques for amounts of Rs 5,00,000 and above.
  • Developed by: National Payments Corporation of India (NPCI) will develop the facility of Positive Pay in CTS and make it available to participant banks.
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