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Your cheque will bounce if you do not follow ''THIS'' mandated rule: RBI
Your cheque will bounce if you do not follow ''THIS'' mandated rule: RBI

The Reserve Bank of India (RBI) launched the Positive Pay System in January this year to prevent fraudulent activity in the country. The frauds are identified by comparing the precise information of user-issued checks for clearance. Customers who will issue checks after the new regulation takes effect must notify their banks and provide check details via net/mobile banking or a physical visit to the branch. If no one does this before submitting a check, the check will bounce.

Some banks offer clients to fulfill this formality by SMS, ATM, or email, although this might be difficult for older individuals or others who are unfamiliar with these methods. The bank will check the information supplied by the issuer, including the cheque number, cheque date, payee name, account number, and amount, once the client has informed them. These details will be cross-checked against the prior checks.

The central bank had directed banks to follow this new system from January 1, 2021, to safeguard all parties from getting involved in fraud activity. The RBI had earlier asked banks to follow this system with cheques amounting to Rs 50,000 and above, but later, it conveyed that banks could also consider making it mandatory for cheques above Rs 5 lakhs too. 

RBI Chief General Manager P Vasudevan, last year in September, said, “The concept of Positive Pay involves a process of reconfirming key details of large value cheques. Under this process, the issuer of the cheque submits electronically, through channels like SMS, mobile app, internet banking, ATM, etc., certain minimum details of that cheque (like date, name of the beneficiary/payee, amount, etc.) to the drawee bank, details of which are cross-checked with the presented cheque by CTS. Any discrepancy is flagged by CTS to the drawee bank and presenting bank, who would take redressal measures.”

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