Positive Pay is a safety process system introduced by RBI. This is introduced to tackle fraudulent cheque transactions and in case cheque leaf is tampered post cheque issuance, the same can be dealt with by positive pay system. Positive pay is applicable to all if you are issuing cheque of Rs. 50,000/- and above. This has been introduced from January 2021.
Hence, if you are issuing a cheque of Rs. 50,000/- and above, you have to submit few details such as cheque number-cheque amount-cheque issued date-beneficiary name to your bank from where you have issued the cheque. You bank will verify the details submitted by you and the actual cheque which come for clearing (via Cheque Truncation System). In case the details submitted by you do not match with the cheque presented in clearing, then your bank will not clear the cheque and will prevent any fraudulent tampering activity. The name is positive pay, bank will pay the cheque only if there is positive matching of data from both side (what you have entered and what is on the cheque).
Now the question is how banks will collect your data. Most banks have built their Positive Pay System in many channels. You can submit positive pay details using Mobile Banking or Internet Banking or via IVR or physically at the bank branches. You can use any of these for entering the cheque details. You need to enter this Positive Pay data before cheque comes for clearing. If you have not submitted this data, cheque will be dishonoured/ sent back. Some banks may send you SMS or call via IVR if they have received your cheque in clearing but not received your Positive Pay, you have to do the needful in such cases then and there without wasting much time.
Positive Pay is not a onetime activity, you have to share details of cheque issued every time you are giving a cheque to someone. However, it’s quite simple. If you are not familiar, just login to your Mobile/ Internet banking today and explore in which menu your bank has provided this feature.
Positive pay is an added safety feature to avoid cheque payment frauds, you may enable or disable this at your account level.