By The Buyt desk
The Reserve Bank of India has changed the rule of cheque clearance from 1st January 2021. The aim is to safeguard consumers against bank fraud and cheque tampering. Banks will implement a ‘positive pay system’ for cheque payment. Under the new system, the cheque issuer will have to re-confirm the beneficiary’s details when he/she makes a payment of more than Rs 50,000. If the consumer wants to avail this system or not will be at his/her discretion.
How will the ‘positive pay system‘ work?
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The cheque’s payee under the positive pay system will have to send the following details of the beneficiary – the name of the person who will receive the amount, the payment amount, the cheque number, details of the issuer, the date on which cheque was issued.
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The cheque issuer will send the information electronically through SMS, mobile app, internet banking or ATM.
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These details will be cross-checked. The cheque will be cleared only after a 100% match between the cheque and the information sent electronically.
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If the cheque truncation system(CTS) points out a discrepancy between the sent information and the cheque details, then the payment will not be honoured.
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RBI has advised making this system of cross-checking mandatory for payments above Rs 5 lakh.
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The National Payments Corporation of India (NPCI) will develop positive pay in CTS and make it available to participant banks.
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RBI has asked banks to spread awareness among their customer about the new cheque clearance system. They must reach out to consumers through SMS alert and display it on their ATMs and branches. As well as the bank’s website must also inform people about the changes and the new procedure.
Bank cheques have remained to be an essential way of transaction. But cheques are handwritten, so there are chances of someone tampering with the cheque by forging a signature. This chance of fraud will be eliminated with the positive pay system. An additional step of cross-verification of details will be introduced with the new system, leaving very little room for any forgery.
