The Reserve Bank of India (RBI) has decided to introduce a 'positive payment system' for checks from 1 January 2021 to prevent bank fraud. Under this, important details will need to be reaffirmed for checks paid more than Rs 50,000. The benefit of this facility will depend on the account holder.
Will have to give details through an electronic medium
However, banks can make this arrangement mandatory for checks with an amount of Rs five lakh and above. Under the positive payment system, the issuer of the check will have to provide some minimum details about the check through an electronic media such as SMS, mobile app, Internet banking, or ATM.
The check truncation system will give information
In this, information about the date, name of the beneficiary, recipient (payee), and the amount will have to be given. These details will be matched before the check is presented for payment. If any discrepancy is found, the Check Truncation System (CTS) will inform the paying bank and the presenting bank. Steps will be taken to correct this.
NPCI will develop facility
National Payments Corporation of India (NPCI) will develop a positive payment facility and make it available to participating banks. RBI said, "After that, banks will apply it to account holders in case of all payments of Rs. 50,000 and above." However, the account holder will decide to avail of this facility. Banks can make it mandatory in the case of checks worth five lakh and above.
The system will be implemented from 1 January 2021
The central bank said that the positive payment system will come into effect 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.