A few things about Positive Pay System

26 Jul 2022 , 02:12 PM

The Reserve Bank of India (RBI) has given the option to banks to make it mandatory that cheques of Rs. 5 lakh or above can be redeemed by using the Positive Pay System (CPPS). The banks are permitted to withhold clearance of such checks if the regulations are not followed. A number of banks, notably the State Bank of India (SBI) and the Bank of Baroda (BoB), have released notices to assist the clients in completing the PPS procedures.

The Positive Pay System: What Is It?

“The idea of positive pay entails a procedure for verifying important information on checks with significant values. In this procedure, the issuer of the check electronically transmits to the drawee bank some minimal information about that check (such as the date, name of the beneficiary/payee, amount, etc.), which CTS then compares to the information on the provided check “Reads the source RBI website.

According to this, the individual writing a high-value check must provide the drawee bank with information such as the date of issuance, beneficiary’s name, etc. You may electronically submit this by email, a mobile banking app, and online banking.

The information will be checked later when the check is handed to another bank for payment processing. The refund will be issued to the depositor if the details match. The check will be returned unpaid if not. The National Payments Corporation of India created this method (NPCI).