The central bank said that the positive payment system will be implemented from January 1, 2021. Banks have been asked to make customers aware of this through SMS.
Mumbai: The Reserve Bank of India (RBI) has decided to introduce a ‘positive payment system’ for checks from January 1, 2021 to prevent bank fraud. Under this, important details will need to be confirmed again for checks paid more than Rs 50,000. The benefit of this facility will depend on the account holder. However, banks can make this arrangement mandatory for checks of Rs 5 lakh and above.
Under the positive payment system, the issuer of the check will have to provide some minimum details about the check from electronic medium such as SMS, mobile app, Internet banking or ATM. In this, information about date, beneficiary’s name, recipient (payee) and amount will have to be given.
These details will be matched before presenting the check for payment. If any discrepancy is found, the check clearing system (Check Truncation SystemCTS) will inform the paying bank and the presenting bank. Steps will be taken to correct this.
National Payments Corporation of India (NPCI) will develop the facility of positive payment and make it available to participating banks. RBI said, “After that, in case of all payments of Rs. 50,000 and above, the banks will apply it to the account holders. However, the account holder will decide to take advantage of this facility. Banks can make it mandatory in the case of checks of 5 lakh and above. ”
The central bank said that the positive payment system will be implemented from January 1, 2021. Banks have been asked to make customers aware of this through SMS. In addition, they will give complete information on branches, ATMs as well as on their website and Internet banking.