To enhance safety of cheque payments, the Reserve Bank o f India (RBI) on Thursday said that it has decided to introduce a mechanism of 'Positive Pay' for all cheques valued Rs 50,000 and above.
‘Positive Pay' is a fraud prevention system that provides additional layer of security on the instrument to prevent forgery or any other alterations. This is offered by the banks to certain corporates dealing in high value check transfers.
Making announcement of the proposed introduction of the new mechanism, RBI Governor Shaktikanta Das said that it will cover approximately 20 per cent to 80 per cent of the total cheques by volume and value, respectively.
"Operational guidelines in this regard will be issued separately," Das said.
Positive Pay will prevent and restrict dishonouring of cheques that often results in financial and criminal penalty for the issuer.
The mechanism is already followed by banks such as ICICI Bank which has a feature by which a customer issuing the cheque can upload its details on the mobile app or other online mechanism.
When the cheque reaches for clearance from the beneficiary bank, it gets checked for authenticity by the clearing bank before the payment is released. As everything works online, this added layer of security offers seamless and easy process for such transactions.