New Rule for Cheque Payments from January 1

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New Rule for Cheque Payments
New Rule for Cheque Payments

The Reserve Bank of India (RBI) decided to introduce the ‘positive pay system’ for cheque a couple of months ago. Under the new rule re-confirmation of key details may be needed for payments beyond â‚ą50,000. This new cheque payment rule will come into effect from 1 January 2021.

Positive Pay is essentially an automated fraud detection tool. It matches specific information related to the cheque presented for clearings, such as the cheque number, cheque date, payee name, account number, amount, and other details against a list of cheques previously authorized and issued by the issuer.

 National Payments Corporation of India (NPCI) shall develop the facility of Positive Pay in the Cheque Truncation System (CTS) and make it available to participant banks. Banks, in turn, shall enable it for all account holders issuing cheques for amounts of â‚ą50,000 and above.

 Under this process, the issuer of the cheque will submit certain minimum details of that cheque like date, name of the beneficiary/payee, amount, etc. to the drawee bank electronically, through channels like SMS, mobile app, internet banking, ATM, etc 

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